BUSINESS BEFORE QUESTIONS

London Local Authorities and Transport for London (No. 2) Bill [Lords]

Motion made,
	That the promoters of the London Local Authorities and Transport for London (No. 2) Bill [Lords], which was originally introduced in the House of Lords in Session 2007-08 on 22 January 2008, may have leave to proceed with the Bill in the current Session according to the provisions of Standing Order 188B (Revival of bills).—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

Canterbury City Council Bill

Motion made,
	That so much of the Lords Message [21 May] as relates to the Canterbury City Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

Leeds City Council Bill

Motion made,
	That so much of the Lords Message [21 May] as relates to the Leeds City Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

Nottingham City Council Bill

Motion made,
	That so much of the Lords Message [21 May] as relates to the Nottingham City Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

Reading Borough Council Bill

Motion made,
	That so much of the Lords Message [21 May] as relates to the Reading Borough Council Bill be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

City of London (Various Powers) Bill [Lords]

Motion made,
	That so much of the Lords Message [21 May] as relates to the City of London (Various Powers) Bill [Lords] be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

Transport for London Bill [Lords]

Motion made,
	That so much of the Lords Message [21 May] as relates to the Transport for London Bill [Lords] be now considered.—(The First Deputy Chairman of Ways and Means.)

Hon. Members: Object.
	To be considered on Tuesday 3 July.

ORAL ANSWERS TO QUESTIONS

TREASURY

The Chancellor of the Exchequer was asked—

Excessive Card Surcharges

Teresa Pearce: When he expects to publish the consultation document on tackling excessive card surcharges.

Andrew Love: When he expects to publish the consultation document on tackling excessive card surcharges.

Mark Hoban: The Department for Business, Innovation and Skills is taking forward work on excessive credit card surcharges. I understand that the consultation to seek views on how and when a ban might be applied is going on in the summer.

Teresa Pearce: For many years, families in my constituency have faced surcharges—sometimes 240 times the actual processing costs—when booking plane tickets. There are now charges on theatre tickets and utility bills and some funeral directors are applying them. Given the prevalence of this issue, does the Chancellor still intend to ban excessive debit and credit card charges by the end of the year?

Mark Hoban: The hon. Lady is absolutely right to highlight the costs imposed by this on our constituents. Our estimate was that in 2010 nearly £500 million was spent by consumers on surcharges. It is still our intention to ban them. Both consumers and businesses should be clear that after many years of inaction by our predecessors, it is this Government’s intention to ban these excessive charges.

Andrew Love: The super-complaint was upheld in December last year. The Government have not even started the consultation that would be necessary to introduce this
	measure. Meanwhile, £8 million a month has been lost just by those suffering surcharges on flights from this country. When are we going to get some action?

Mark Hoban: As I said, we are going to publish a consultation this summer and take action to ban these surcharges as soon as possible after that. We should be very clear not only that we are going to ban them, but that some firms have already responded to the action we are going to take, with a number of them reducing their charges on credit and debit card use. That shows that even without legislative action, consumers are getting a better deal as a consequence of our policy.

David Evennett: This is a matter of very serious concern to our constituents. May I welcome the Minister’s commitment to tackling the payment surcharges and urge him to do whatever he can as soon as possible?

Mark Hoban: I am grateful for my hon. Friend’s welcome. I am working closely with the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for North Norfolk (Norman Lamb), who is responsible for consumer affairs, to ensure that we act as quickly as possible to ban these surcharges and to deliver a better deal to consumers.

Quantitative Easing

Natascha Engel: What estimate he has made of the proportion of the money issued through quantitative easing which has been used by banks to pay off their debts.

George Osborne: Quantitative easing is a tool of the independent Monetary Policy Committee and has been designed to work through channels other than the impaired banking system by stimulating activity in capital markets. The Government and the Bank of England are working together on a new funding for lending scheme that will more broadly support sustained and increased bank lending to the economy. I can confirm for the first time that in the three months since the start of the national loan guarantee scheme, over 10,000 cheaper loans worth over £1.5 billion have been offered to businesses. I can also confirm that we have today secured EU state aid approval to extend the scheme to medium-sized businesses with a turnover of up to £250 million. That means 99.9% of UK businesses can now benefit.

Natascha Engel: Quantitative easing was certainly intended to stimulate the economy, but in reality it is being used to write off the debts of reckless banks with hundreds of billions of pounds’ worth of virtual money. Has anyone in Government thought through the consequences of this policy, and if so, what are they?

George Osborne: The Bank of England conducted a study of the first round of QE that it undertook under the last Government, and estimated that it had increased real GDP by between 1.5% and 2%. The Bank’s chief economist says that the asset programme regime
	“was explicitly designed to go around the banking system”.
	I therefore do not accept the hon. Lady’s characterisation.

Andrew Tyrie: Now that the Bank of England has finally shown more willingness to provide some liquidity support, there should be no obstacle to the exercising of more flexibility by the Financial Services Authority when it comes to how the liquidity buffers are used. That is being desperately demanded by banks. Does my right hon. Friend agree that the FSA should take action as soon as possible, and that such action is what is required to provide borrowing and lending at reasonable rates for the hundreds and thousands of businesses throughout the country that need it so desperately?

George Osborne: The liquidity auction undertaken by the Bank of England last week was very welcome, and the Bank is proposing future auctions. My hon. Friend, who chairs the Treasury Committee, has been prescient in pointing to some of the procyclical nature—if unintended—of some of the liquidity regulation in the United Kingdom in recent years. The Financial Policy Committee was set up to look at risks on both the downside and the upside. The Financial Services Authority must make its own independent decisions, but I am sure that it will have paid close attention to my speech and to the speech of the Governor of the Bank of England at the Mansion House.

Adrian Bailey: Notwithstanding the Chancellor’s warm words about the impact of quantitative easing, I have yet to meet a banker, a businessman or indeed a Government representative who can identify the benefits that have accrued as a result of its introduction. While I do not necessarily oppose it, all the evidence that I am being given by bankers suggests that lack of demand is causing the main problem. Will the Chancellor do something to stimulate consumer demand and investment confidence in order to maximise the potential that quantitative easing might bring?

George Osborne: In conducting its most recent assessment of the UK economy, the IMF explicitly looked at unconventional monetary policy tools that are currently being used, and concluded that quantitative easing was having a positive impact. I think that we should welcome that. I believe that we are able to pursue loose monetary policy—that we are able to use all the tools that are available to us on the monetary policy side—precisely because we have international credibility on the fiscal side.

Matthew Hancock: I, too, warmly welcome the action of the Bank of England last week to increase liquidity in its liquidity auction, but should not the role of the Financial Policy Committee be not only to stand against procyclical financial policy and liquidity buffers, but to lean against the wind and make sure that we can get the lending to businesses in our constituencies?

George Osborne: The Government established the Financial Policy Committee because under the previous tripartite regime, designed and implemented by the shadow Chancellor, absolutely no one was paying attention to overall levels of debt and credit in the economy. That is why we had such a deep recession, and why we went from such a large boom to such a big bust—to coin a
	phrase. My hon. Friend is entirely right: the FPC should be symmetrical in the way in which it looks at risks. We have made that clear, and we are amending the Financial Services Bill in the House of Lords to ensure that that the FPC has, as a secondary objective, due regard for the Government’s broader economic policy.

Jonathan Edwards: Yesterday the Financial Times reported that the Bank for International Settlements was warning of the dangers for economies that get hooked on ultra-low interest rates. Is not the reality that monetary policy alone will not kick-start the sustained recovery, and that fiscal intervention will be needed if we are to avoid a lost decade?

George Osborne: The very low interest and mortgage rates in Britain are extremely welcome to families and businesses across the country. If we want to know what the alternative looks like, we just have to look across the channel at countries that have not been able to maintain their credibility in international markets, where we see rising bank lending and funding costs and increased costs for Government borrowing. We have now five countries in the eurozone who have had to apply for bail-outs. It is because we have fiscal credibility despite inheriting the largest budget deficit in the European Union that we have been able to keep our interest rates very low.

Ian Swales: I, too, welcome the announcement of extra liquidity for our banks, but how will the Chancellor ensure that our international banks lend this money to British businesses?

George Osborne: The funding for lending scheme, which the Governor and I announced at the Mansion House, is explicitly designed to address the high bank funding costs and it is tied to lending into the UK economy, so that is precisely what this new scheme is designed to do.

Economic Growth

Stephen Timms: What recent estimate he has made of the level of economic growth in 2012.

Danny Alexander: The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. In its March economic and fiscal outlook, the OBR forecasted economic growth of 0.8% in 2012, but more recent independent forecasts have been lower, reflecting the fact that the euro-area crisis remains the biggest risk to the UK recovery.

Stephen Timms: A worryingly large jump in Government borrowing has been reported today. Why is it that of all the G20 countries, only Britain and Italy are in recession?

Danny Alexander: The right hon. Gentleman refers to borrowing, but his Front-Bench team wants us to borrow tens of billions of pounds more, which is not the right response. If he studies the figures carefully, he will see that departmental spending is rising much less than was forecast, but, of course, the automatic stabilisers in the
	economy are operating. That is precisely the flexibility in our plan, which is tough on the structural deficit but supportive of the economy.

George Freeman: Has my right hon. Friend seen the latest Office for National Statistics figures, which show that unemployment is down 50,000 in the last quarter and over 800,000 new jobs have been created since we took office? Does he agree that this suggests that the Government’s programme of deficit credibility, public sector restraint and support for business is laying the foundations for a sustainable recovery?

Danny Alexander: I am grateful to my hon. Friend for that question. He is, of course, right to say that the recent figures show that unemployment has been falling, and that is good news, of course. Inflation is also coming down, which is good news for hard-pressed consumers.

Rachel Reeves: Does the Chief Secretary think the fact that the economy is in recession explains why today’s figures show that borrowing is going up, not down as the Government intended?

Danny Alexander: As I said to the right hon. Member for East Ham (Stephen Timms), the figures reflect a combination of things, including the fact that departmental spending has been held down by more than was forecast, but the automatic stabilisers in the economy are operating. That is the flexibility in our plan. It is because of the fiscal credibility the Government have brought to this country that we can do that.

Rachel Reeves: I do not think the Chief Secretary answered the question. Figures out this morning show that, with the economy in recession, tax receipts are falling, and the benefits bill is going up, so borrowing is already £4 billion higher this year than last. Is it not time that the Government admitted their plan has failed, and without action on jobs and growth, borrowing does not go down, it just goes up?

Danny Alexander: That is an astonishing question from the party that made the mess in the British economy that we are trying to clear up, and the party whose plans wanted this Government to borrow even more. That just goes to show what would have happened to the UK economy if we had been unfortunate enough to have the Labour party stay in power.

Nicholas Soames: Does my right hon. Friend agree that protectionism is the enemy of economic growth? What steps will he take to re-energise the Doha round?

Danny Alexander: I wholeheartedly agree with my right hon. Friend. It is a very important point that, in times of economic stress worldwide, some countries may seek a protectionist approach. That is why at the forthcoming European summit the Prime Minister will again be arguing for measures within Europe to strengthen the single market and to increase free trade within the EU, and for measures for the EU to take to build on the free trade agreements that, collectively, we are signing with a number of other important economies in the world. We need to keep up the momentum of that process in order to help support the world economy.

Regional Pay

Jessica Morden: What progress he has made on his consultation on regional pay for public sector workers; and if he will make a statement.

Chloe Smith: The independent pay review bodies are considering how public sector pay can be made more responsive to local labour markets, and will report from July. Nothing has been decided, and no changes will be made unless there is strong supporting evidence and a rational case for proceeding.

Jessica Morden: The Tory finance spokesperson in the Welsh Assembly said that introducing regional pay could disadvantage thousands of public sector workers, and that
	“we are making it absolutely clear that we are against”
	it. Does the Minister agree?

Chloe Smith: As I have just set out, this is a question at present for the independent pay review bodies, which will report back in July. There is an argument that more local, market-facing pay in the public sector has the potential to support more for the same investment, and to help local businesses become more competitive.

Michael Fallon: How can it be fair for small businesses outside London and the south-east to have to compete for staff paid on national rates working in public offices? Given that the last Government committed us to local pay nearly 10 years ago, and that it already operates in the Courts Service, what is the problem with encouraging other departments to follow suit?

Chloe Smith: My hon. Friend makes a valuable point that I am sure the independent pay review bodies will consider. If I were to put a number on the average premium for working in the public sector, I could name 18% in Wales.

Cathy Jamieson: Last week, it was left to the Minister for the Cabinet Office and Paymaster General to come to the Chamber to explain the Treasury’s position on regional pay. Was that because the Chief Secretary does not support the policy and the part-time Chancellor does not want to make another U-turn?

Chloe Smith: We had an extensive and rather premature debate on this last week in the Chamber, and I shall say again what I said then: the independent pay review bodies are producing a report, and it would be premature to review that without the evidence, which they are considering.

Cost of Living

Sarah Newton: What recent steps he has taken to reduce the cost of living.

George Osborne: Rising global prices have increased the cost of living for families here in Britain. This coalition Government will do everything we can to help. We have already frozen council tax, kept mortgage bills low and abolished the fuel duty escalator. I can tell people that we will now stop any rise in fuel duty this August and freeze it for the rest of the year. This means that fuel duty will be 10p a litre lower than planned by the last Labour Government. We are on the side of working families and businesses, and this will fuel our recovery at this very difficult economic time for the world. The one-off cost of this change will be fully paid for by the larger than forecast savings in departmental budgets, and we will set out details of those, as usual, in the autumn statement.

Sarah Newton: If I were not on crutches I would be jumping for joy. The people of Cornwall will really welcome this move, which proves once more that this Government are on the side of hard-working families.

George Osborne: My hon. Friend is absolutely right and I know this news will be welcome in Cornwall, as across the country. I repeat: because of the actions we have taken today and in recent Budgets, petrol duty is 10p a litre lower than it would have been under the Budget plans voted for by the Labour party. We are on the side of working families, we are helping motorists, helping businesses—doing everything we can in very difficult circumstances for the world.

Catherine McKinnell: I am glad that the Chancellor is beginning to listen to the shadow Chancellor. However, the Government’s own figures show that cuts to tax credits are leaving thousands of parents up to £72 a week worse off, and some are better off if they quit their jobs. With the cost of living rising and the economy in double-dip recession, surely it is time we saw a U-turn on this perverse policy, to make sure that work pays.

George Osborne: First, all families, if we take into account the benefit and tax changes, are £5.50 better off a week from April, and we have actually increased tax credits for the poorest families. We have had to make difficult welfare changes. They were completely opposed by the Labour party, which also opposed the cap on welfare benefits. We have to ask the question: what would Labour Members do to get control of the budget deficit that they created? We have had two years and not a single answer from Labour. That is why, as I say, we are the people trusted to lead this country out of the economic mess that they put us in.

Andrea Leadsom: Does my right hon. Friend agree that it is astonishing that Opposition Members do not welcome his announcement to cut the fuel duty that they proposed when they were in government? Does he agree that this Government will focus everything they can on cutting the cost of living for hard-working people?

George Osborne: We should judge people by actions as well as words, and Labour Members voted for increases in fuel duty, which this Government have stopped. That is because we are on the side of working families, whereas Labour Members are simply on the side of the economic mess that they created.

Economic Performance

Andrew Gwynne: What assessment he has made of the performance of the economy in the last 18 months.

Danny Alexander: As the Office for Budget Responsibility made clear last autumn, Britain’s recovery has faced strong headwinds from the euro area, high oil prices and the impact of the financial crisis being deeper than previously thought. Our actions to reduce the deficit and rebuild the economy have secured stability and kept interest rates near record lows, benefiting families, businesses and taxpayers, although, of course, considerable external risks remain.

Andrew Gwynne: That just does not wash, because by May 2010 the British economy was growing, whereas since the Government’s emergency Budget of June 2010 the economy has at best flatlined and at worst dropped back into recession. Why does the right hon. Gentleman think that is?

Danny Alexander: By May 2010, the hon. Gentleman’s Labour Government had put in place plans to increase fuel duty by above the rate of inflation each and every year of this Parliament. He should be welcoming the fact that we are taking steps to support hard-pressed families and hard-pressed consumers across the country in the very difficult economic circumstances that we face.

Robert Halfon: Does my right hon. Friend agree that motorists across the country will welcome the cut in fuel tax announced for August and that it will greatly improve the performance of the economy? Does this not show that the Government are on the side of hard-pressed working people?

Danny Alexander: I agree entirely with my hon. Friend. I met representatives of the FairFuelUK campaign yesterday. We have a great deal of sympathy with its arguments, as well as with those made by families across this country, including in remote and rural areas. It is worth saying that thanks to the decisions this coalition Government have made not only is fuel tax 10p a litre lower than under Labour’s plans, but council tax is lower and income tax is lower. In the Budget in March we also saw the largest ever increase in the income tax personal allowance, all of which puts money back into the pockets of hard-pressed families.

EU Regulations

David Nuttall: What recent assessment he has made of the effect of EU regulations on economic growth.

Mark Hoban: The Government are taking action to reduce the burden of EU regulation on UK business. At Budget 2011, the “Plan for Growth” announced a comprehensive package for tackling EU regulation. The Government estimate that the cost of European regulations to the UK has varied from 27% to 60% of the total UK regulatory cost since October 2009.

David Nuttall: I am grateful to the Minister for that reply. Although British businesses will welcome the fact that the United Kingdom is not in the eurozone, and will not suffer from the loss of sovereignty and the new regulations that fiscal union would mean, they are nevertheless burdened by EU-imposed red tape, which means that it is much harder for them to compete successfully for new contracts against companies from outside the EU, which are not subject to such regulations. May I urge him urgently to conduct an investigation into and an assessment of the extent to which that is holding back the British economy?

Mark Hoban: My hon. Friend makes an important point, and that is why we are taking action through the “Plan for Growth”. We want the Commission to publish an annual audit of the cumulative cost of all planned EU regulations, but assessments are not enough in themselves, which is why as a consequence of lobbying by this Government the EU has introduced an exemption for micro-businesses and is looking at lifting the burden of regulation on the small and medium-sized businesses that are key drivers of growth in our economy.

Kelvin Hopkins: I am sure I am not alone in believing that what regulation we do have should be made by this Parliament and not by the Commission in Brussels. However, I am sure that the Minister will be aware of the survey reported by the CBI that shows that 94% of businesses are concerned above all about demand and the ability to sell their goods and services. Is that not the problem with Government economic policy?

Mark Hoban: What we need are measures to tackle some of the structural problems in the economy that we inherited from the previous Government and to tackle issues to do with education, transport infrastructure and the complexity of the tax system. Those are the reforms we need to ensure that the economy grows.

Economic Growth

Damian Collins: What recent steps he has taken to encourage economic growth.

George Osborne: To help the economy, we are cutting taxes for businesses and families. We are, as we have just heard, freezing fuel duty, helping 10,000 businesses with the national loan guarantee scheme, reforming the planning system, creating enterprise zones, setting up the regional growth fund and creating the biggest number of apprenticeships this country has ever seen.

Damian Collins: The recent Growth Factory report on industrial strategy highlighted the importance of rebalancing our economy. Does the Chancellor agree that the record increase in employment in the manufacturing sector in the first quarter of this year is a welcome sign of the growing confidence at the heart of our economy?

George Osborne: My hon. Friend is right and I commend him and his group for the interesting ideas, many of which I agree with, that they are promoting. He is absolutely right to point out the increase in employment,
	including in manufacturing employment. An interesting recent statistic from an independent international body on the British economy showed that the share of manufacturing in the UK economy is increasing for the first time in a very long time, having almost halved under the previous Labour Government.

Jim Cunningham: Why did not the Chancellor cut fuel duty sooner? Why has it taken him all this time? He has done about 33 U-turns as far as I can see.

George Osborne: Last year we cut fuel duty and froze it. This year, we have frozen it again and the hon. Gentleman should welcome that. I know that he is in a slightly difficult position in that he was one of the Labour MPs who voted for the increase that we have now delayed, but he should just get up and welcome these moves.

Stephen Gilbert: Economic growth in Cornwall would be discouraged by the introduction of regional pay or the regionalisation of benefits. Will the Chancellor undertake to publish the Government’s evidence to the independent pay review bodies that are considering this issue?

George Osborne: I point out to my hon. Friend that we have published that evidence. As I say, the matter is now with the independent pay review bodies, so let us wait to hear what they have to say.

Infrastructure Investment

Roberta Blackman-Woods: If he will discuss with his ministerial colleagues bringing forward the timing of public infrastructure investment in order to encourage economic growth.

Danny Alexander: We are having those discussions as we speak. We are already spending more on new roads and new rail now than we were at the height of the spending boom in the previous Parliament. We have provided £2.4 billion for the regional growth fund, £770 million for the Growing Places fund and £570 million for the Get Britain Building fund. We can also support infrastructure investment through the use of Government guarantees and will be announcing more about how we plan to do so later this summer.

Roberta Blackman-Woods: But will the Chief Secretary listen to the business leaders quoted recently in the Financial Times, who said that they had heard Ministers talking about infrastructure projects for months but with no visible results? Will he publish a timetable today, or very soon, for each region showing the projects that will be brought forward with their delivery dates?

Danny Alexander: The hon. Lady will have seen that last November we published the national infrastructure plan, which does precisely what she said and which was widely welcomed by business leaders and business organisations across the country. She will know that we are spending more on road and rail than the previous Government managed, including on a number of projects in her part of the world.

Jane Ellison: My constituents warmly welcome the Government’s support for the Northern line extension in the Vauxhall/Nine Elms development area. Is that not a good example of exactly the kind of infrastructure project that the Government could support to help unlock economic growth?

Danny Alexander: It is precisely such an example of the sort of infrastructure that this country needs and the sort of project from which the economy of London and elsewhere will benefit if we can bring the investment forward and make things happen more quickly. As I said, we are looking for ideas about doing just that.

Geoffrey Robinson: Is the Chief Secretary not aware that the so-called national infrastructure programme is way behind schedule, that the construction industry is flat on its back and that the apprenticeships in that sector, so badly needed by the industry and by the Government, are seizing up? Why does he not get his finger out and do something about it instead of making vague promises?

Danny Alexander: The hon. Gentleman is wrong to say that the national infrastructure plan, which we published last November, is behind schedule, but of course he is right to say that there are problems in the construction sector. That is why we have taken a number of steps to support the house building sector, but we will make further announcements in that area later this summer.

Elizabeth Truss: Over the past four years, footfall on the Norwich-Cambridge line and the Fen line has increased by 20%. In the Government’s infrastructure plan, will they bring forward the upgrading of the Ely North junction, which will enable half-hourly services on both those lines?

Danny Alexander: I do not know the details of the Ely North junction project but I shall certainly raise the matter with the Secretary of State for Transport. However, that is precisely the sort of project we have been bringing forward over the past two years to support economic growth across the whole of the United Kingdom, rather than having a model of growth based solely on receipts from the City of London, which was basically the policy of the Labour party.

Small Businesses

Rob Wilson: What recent steps he has taken to increase bank lending to small businesses.

Mark Hoban: The Government have launched a package of credit easing measures to improve credit availability for smaller businesses. This includes the £20 billion national loan guarantee scheme and the business finance partnership, which will provide £1.2 billion of additional finance through non-banking channels. The Government and the Bank of England are working together on the new funding for lending scheme, which will provide funding to banks linked to their lending to the real economy.

Rob Wilson: There are a significant number of small businesses in my constituency that want to expand and create jobs but cannot get sensible bank financing. I therefore welcome the recently announced funding for lending scheme, but I understand that in exchange for this funding, banks will have to provide collateral to the Bank of England. Will my hon. Friend confirm, given that the precise details of the scheme are not available yet, whether small loans will be acceptable to the Bank of England as collateral? Otherwise, the desired lending to smaller businesses will not get off the ground.

Mark Hoban: My hon. Friend makes a very important point. He is right to point out that the details of the scheme have yet to be finalised, but I take on board his comments. We will discuss this with the Bank of England. It is important that the scheme works and that it helps funding and lending to households and businesses.

George Mudie: In view of the banks’ disgraceful behaviour on delivering the Merlin agreement, will the Minister assure the House that this new scheme will be transparent and will be published and monitored independently each month? Above all, will he assure us that every pound of additional money that goes to the banks through this scheme will mean additional lending to small businesses and households?

Mark Hoban: The scheme is designed to encourage lending not just to small businesses and households but across the board to all businesses. We want to make sure that when banks put collateral to the Bank of England, it is in response to their having lent more. That is absolutely vital for a scheme that encourages lending and we will make sure that we design the scheme to do so.

Child Poverty

Russell Brown: What assessment he has made of the effect of the Government's fiscal policies on the level of child poverty.

Chloe Smith: The Social Mobility and Child Poverty Commission is being set up and will provide an assessment of child poverty using a wide range of measures, including income.

Russell Brown: Before the 2010 election, the Prime Minister said:
	“Poverty is relative—and those who pretend otherwise are wrong.”
	Why are the Government now planning to abolish that measure of child poverty?

Chloe Smith: The Government have confirmed their commitment to child poverty targets and we are going further by consulting on better measures of child poverty in the autumn. We seek a range of views on that.

Andrew Bridgen: Does the Minister agree that the real failing of the previous Government was their narrow focus on income
	transfers instead of addressing the real root causes of welfare dependency such as low aspirations and worklessness?

Chloe Smith: I certainly do. The important point is how we help people to get out of poverty and stay out. I note that there are problems with the current measure of poverty. Because median incomes fall, children are considered to have moved out of poverty when there will have been no real change to their lives. That cannot be a fully accurate measure.

Kate Green: What will the Government do to address the still very high levels of in-work poverty, and how can freezing working tax credit and reducing help with child care costs possibly help?

Chloe Smith: Let me name a number of things the Government are doing to support families and let me note our plans to move toward universal credit, which will help with work incentives. Let me note our plans to have doubled the number of disadvantaged two-year-olds receiving free hours of child care each week. On tax credits, let me note that we have had to fix the previous Government’s unsustainable budgeting in that area and that six out of 10 families with children are still eligible.

Charlie Elphicke: Is it not especially important that we take action on child poverty, given the quite sharp increase in the previous Parliament? The targets were missed by about 600,000, I think, and when the previous Government left office, 4 million children were in poverty.

Chloe Smith: My hon. Friend is correct: child poverty is a real problem. This Government are committed to eradicating it and to increasing social mobility. We are taking the measures to assist children that I listed in response to the previous question. I should also point out that the average household gains about £5.50 a week from the tax and benefit changes made in April this year. We are making progress and acting where we can. It is important to keep up the pressure on child poverty.

Fuel Duty

Philip Hollobone: What assessment he has made of the effect on economic growth of increases to fuel duty.

Chloe Smith: The effects on the economy of fuel prices, including oil prices, refinery margins and tax, are assessed by the Office for Budget Responsibility as part of its economic and fiscal forecasts.

Philip Hollobone: Motorists in the Kettering constituency and local hauliers will warmly welcome today’s announcement by the Chancellor. Has my hon. Friend undertaken any analysis of the negative impact on national economic growth that would have occurred had the present Government increased fuel duty by as much as the previous Government intended?

Chloe Smith: I can confirm that, through the actions of this Government, pump prices are 10p a litre lower than they would have been under the previous Government, who had scheduled in 12 fuel duty rises while they were in office and six more for afterward.

HMRC Helplines

Chris Evans: What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.

David Gauke: The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.

Chris Evans: A constituent of mine has had a nightmare experience trying to get through to HMRC: he phoned several times throughout the week, but never spoke to an adviser and kept getting an engaged line. His is just one of many cases involving HMRC in my constituency office at the moment. With 10,000 HMRC staff being laid off, how do the Government hope to clamp down on tax avoidance when they obviously cannot collect taxes in the first place?

David Gauke: The first point to make is that the numbers of front-line staff dealing with tax avoidance and tax evasion are increasing over the course of this Parliament, in contrast with that happened during the last Parliament. There has been improvement in contact centre performance in the number of calls that get through, but more progress is needed. HMRC is deploying staff more flexibly and conducting small-scale pilots to see whether the private sector can provide additional capacity. HMRC is determined to improve performance.

Jo Swinson: My elderly constituent Mr George Robertson is concerned about the amount of money that has been wasted because of a catalogue of errors over two years by HMRC helplines and administration. They wrongly issued cheques for overpayments to Mr Robertson, despite his correctly informing them that, in fact, he owed money; and when the saga was eventually “resolved” in April, they got it wrong again. Will the Minister look into that case and the wider lessons that need to be learned, so that HMRC becomes more accurate and cost-efficient?

David Gauke: I am grateful to my hon. Friend for raising that point and I am happy to look into the case. HMRC’s record in dealing with end-of-year reconciliations and improving accuracy is moving in the right direction, but there is more to do.

VAT (Savoury Products)

Chi Onwurah: What representations he has received on the treatment of different savoury products for the purposes of levying VAT.

David Gauke: HMRC is shortly to publish on its website a summary of the responses to its consultation, “VAT:
	Addressing borderline anomalies”. The response document will contain a list of those who contributed to the consultation.

Chi Onwurah: As I am sure you know, Mr Speaker, Newcastle is the home of the Greggs pasty, so I was hopeful that the Chancellor’s latest U-turn but one would have resolved the great savouries shambles, but now I learn that he has turned his wrath on the pretzel sellers of Newcastle, including Auntie Anne’s in Eldon Square. Could the Chancellor possibly focus on bringing growth to the economy, rather than confusion to our eating habits?

David Gauke: I am sure the hon. Lady is aware that Greggs welcomed what we said about hot food. None the less, there has been an anomaly in the tax system whereby some hot foods have been treated differently from others. We are seeking to remove that anomaly and that is exactly what we are doing.

Fiscal Policies (Output)

Kevin Brennan: What recent estimate he has made of the effects of his fiscal policies on the rate of growth in output.

Chloe Smith: Tackling the deficit is necessary for supporting sustainable economic growth. The Government’s credible consolidation plan, which includes important measures to support investment and output, has restored confidence in the UK’s fiscal position, helped avoid a rise in market interest rates and allowed a more activist monetary policy.

Kevin Brennan: Given that the lead-in time for fiscal policy is about 18 months, how can the Minister explain the fact that the UK economy is now in recession, following the full impact of her Government’s fiscal policies?

Chloe Smith: It is essential to return the public finances to a sustainable path. It is this Government who are doing that, it is this Government who are keeping interest rates low, it is this Government who are taking action on fuel duty, and it is the Opposition who have no answers at all.

Topical Questions

David Morris: If he will make a statement on his departmental responsibilities.

George Osborne: The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking and manage the public finances so that Britain starts to live within her means.

David Morris: Inflation has now lowered from 3% to 2.8% in May, which should be welcomed on both sides of the House. Does my right hon. Friend agree that it is other Government measures such as freezing the council tax, freezing the fuel duty and increasing the personal
	allowance that have helped tens of thousands of my constituents in Morecambe and Lunesdale with their cost of living?

George Osborne: I absolutely agree with my hon. Friend that it is very welcome news that inflation is now falling. That will help families. The Government want to help families further by keeping those mortgage costs very low, and the only way we can do that is by having a credible plan for the public finances. We have also frozen the council tax, increased the personal allowance, with another big increase next year, and as my hon. Friend has just heard, frozen fuel duty for the second year running, so that his constituents in Lancashire and people across the whole country can be helped at this difficult economic time.

Edward Balls: The Chancellor told the “Today” programme a few weeks ago that the only thing worse than listening is not listening. Well, he certainly listened to the “Today” programme this morning. We have now had U-turns on pasties, churches, charities, caravans and skips, and today a U-turn on fuel, which we welcome. It would be interesting to know at what point this morning the decision was made, and whether the Transport Secretary was even told. Now that the Chancellor is on a roll, will he also do a U-turn on the millionaires’ tax cut and rescind the granny tax rise? There is a vote next week. Will he join us in the Lobby or will he do the U-turn first?

George Osborne: It is quite difficult for a Conservative Chancellor to do a U-turn on a Labour policy. I am not sure the Opposition is entirely joined up—or maybe it is because the right hon. Gentleman waited half an hour to come in. The hon. Member for Hyndburn (Graham Jones) sitting directly behind him, who is a Labour Whip, has just tweeted on the fuel duty announcement that it is a deferred rise and cannot improve the economy. If the Labour Whip thinks it will not improve the economy, what does the shadow Chancellor think it will do?

Edward Balls: It is about time this part-time, U-turning Chancellor took some responsibility for his own decisions. What is the reality? A double-dip recession, borrowing rising, family budgets under pressure—his plan has failed. Is it not time he listened to the Opposition and admitted that austerity has failed? Is it not time he did another U-time and adopted Labour’s five-point plan for growth and jobs?

George Osborne: We enjoyed reading recently that the right hon. Gentleman has been spending thousands of pounds on commissioning private opinion research about why his economic message is not getting through. It was leaked to the papers, saying that he was seen as “uninspiring” and “untrustworthy”. He had no need to spend thousands of pounds on that. He can ask Labour MPs and get that opinion of the shadow Chancellor. He has had two years to come up with a credible economic policy, and two years to apologise for his part in putting Britain into the economic mess that we are taking Britain out of.

David Evennett: Does my right hon. Friend agree with the head of the IMF, who said that she shivers to think what would have happened to the British economy without this Government’s plans to reduce Labour’s deficit?

George Osborne: The Managing Director of the IMF put it in a very graphic way. She presented to the whole country the alternative that we faced in May 2010. If we had stuck with the Labour party’s incredible plans, we would be one of the countries seeking a bail-out, rather than, as we are now, a country that is a relatively safe haven in the very, very difficult European situation. [ Interruption. ] The shadow Chancellor will not move forward unless he concedes his role in getting Britain into this mess. Until he does that, he will remain a man of the past with no ideas for the future.

Jim McGovern: Will the Chancellor update the House on what progress has been made on his offer to the computer games industry of tax incentives in his last Budget? It is important to get the details of the policy correct, but it is also important that time is not wasted unnecessarily. As the old adage goes, actions speak louder than words. When can we expect to see the words turned into action?

George Osborne: We will be consulting on that policy very, very shortly, alongside the new credits for animation and high-end television production. The video games industry is important in Scotland—for example, in Dundee there is a particular centre of excellence—but it is important across the entire UK, and the video game tax credit will help, alongside animation and high-end TV production.

Jessica Lee: In order to help small businesses and those seeking new opportunities, will my right hon. Friend endorse the jobs fair that I am hosting in Erewash on 5 September? Will he further set out what the Government are doing to support small businesses, which remain the real engine of the British economy?

George Osborne: I certainly support my hon. Friend and congratulate her on organising the jobs fair. As the most recent unemployment figure showed, not only is unemployment falling but 200,000 private sector jobs have been created in the last few months in our economy. When it comes specifically to small businesses, as I set out to the House earlier today, the national loan guarantee scheme has already helped more than 10,000 businesses with loans, we have cut the small companies corporation tax from the rate we inherited from the last Government, and the freeze in fuel duty will also help small businesses.

Dennis Skinner: In a time of austerity, when food banks are increasing in almost every town and city in Britain, is it not high time that the Government published a comprehensive list of all those people who are profiting from these tax avoidance schemes? Even Graham Aaronson, a Government adviser, forecast today that if something is not done there will be riots on the streets. This is a
	home-grown problem. Do not blame anybody else. Let us have a list of all those people close to home and those on millionaires row.

George Osborne: The last Labour Government, which the hon. Gentleman supported, had 13 years to introduce a general anti-avoidance rule; we are introducing one after just two years in office. The last Labour Government had 13 years to stop stamp duty avoidance schemes; this Government, after two years in office, are doing exactly that and stopping those schemes. The last Labour Government had 13 years to cap uncapped income tax reliefs, which are used for avoidance; we have introduced and are introducing that cap. Frankly, actions speak louder than words.

John Baron: With belt-tightening very much on the agenda right across Europe, will the Chancellor at least consider making deep cuts to our EU budget contributions, and so ally himself with the vast majority of people in this country?

George Osborne: We have worked very hard to freeze the EU budget during the last couple of years and avoid the very large increases that both the Commission and the European Parliament have sought. We are now beginning the very important negotiations on the next multi-year budget framework, and our objective is to deliver the best deal for the British taxpayer and make sure that unnecessary money is not going over to Brussels.

Gemma Doyle: Written answers to my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) reveal that the nationalist Scottish Government have made no approach whatever to the UK Government on membership of the Bank of England’s Monetary Policy Committee. Does the Chancellor think that Scotland would have more influence on monetary policy as part of the UK or outside the UK using sterling as a foreign currency?

Danny Alexander: The hon. Lady refers to just one of a number of shambolic statements made by the Scottish National party since it launched its campaign for independence a few weeks ago, and not just on the Bank of England, but on financial services regulation. She makes the point very powerfully indeed that Scotland is “better together” as part of the United Kingdom. We have greater strength together as part of a more credible economic unit and part of the shared monetary policy of the Bank of England. All that would be jeopardised if Scotland were ever to become independent.

Andrew George: The Chief Secretary has rightly committed the Government to clamping down on tax avoidance. Given recent high- profile cases of tax avoidance, and notwithstanding the earlier question from the hon. Member for Bolsover (Mr Skinner), will my right hon. Friend update the House on the progress being made and perhaps give a projection for the progress he expects over the rest of this Parliament?

Danny Alexander: I am grateful to my hon. Friend for his question. As the Chancellor said, the Government have done more on this issue in two years than the previous Government managed in 13 years. In particular,
	at the time of the spending review I announced that we would invest an extra £900 million in Her Majesty’s Revenue and Customs so that it could employ a large number of additional experts to deal with tax avoidance. That programme is projected to lead to an additional £7 billion a year in tax revenue by the end of this Parliament, and we are well on track to meet that objective.

Gregg McClymont: Can the Chancellor confirm that the Government are going to spend an additional £150 billion in borrowing above their plan of a year ago?

George Osborne: The Institute for Fiscal Studies was very clear that, had we pursued the plan proposed by the previous Government, borrowing would be £200 billion more than it is today. As I have said, it is this Government’s credible fiscal plan that has brought record low interest rates and market credibility. We can see across the English channel what would happen if we did not have that credibility. That is where Labour would have put us.

Tony Baldry: Has my right hon. Friend noticed that the most recent figures from the Office for National Statistics show that employment is up by 311,000, the biggest quarterly increase since the general election, and does not that mean that since the general election two jobs in the private sector have been created for every job lost in the public sector?

George Osborne: My hon. Friend—a knight of the realm—is absolutely correct. Despite these very difficult and challenging economic times, the private sector is creating jobs. We of course have to help it to create more jobs through the measures I have already outlined—cutting the small companies tax rate, help with credit and the like—but we also need to help those looking for work. That is why we have the Work programme and the youth contract, instruments that are much more effective than the programmes promoted by the previous Government at helping people who are out of work to link up with companies that want to employ people.

Chris Williamson: Britain is the only G20 country in a double-dip recession, youth unemployment is at record levels, poverty is on the increase, public services are in meltdown, and the Government are borrowing around £4 billion more this year than they did last year. The lessons of the 1930s demonstrate that the austerity programme that the Chancellor is pursuing will not work. Will he learn the lessons of history—

Mr Speaker: Order. We are extremely grateful, but I am afraid that we do not have time to go back to the 1930s now. We have the gravamen of the hon. Gentleman’s question.

George Osborne: I suggest that tonight and tomorrow the hon. Gentleman turns on the television and watches the evening news, because he will see that there are problems facing many economies around the world. The Labour idea that somehow Britain alone faces these challenges
	because the Government are trying to deal with the debt is absolutely ridiculous. There are all these European economies in recession, the US economy had disappointing jobs data, and the Chinese economy is slowing. These are difficult times, but we are doing everything we can to help the British economy deal with the problems we inherited.

Dominic Raab: Last year we lost the most working days to strikes in 20 years, and since the last election union leaders have never won the backing of a majority of their members for any major strike. Will my right hon. Friend task the Office for Budget Responsibility to provide annual estimates of the cost to the economy of strikes and of the concessions, paid for by taxpayers, to avoid them?

Danny Alexander: I am not sure that the hon. Gentleman’s suggested idea would be an appropriate task for the Office for Budget Responsibility to undertake, but he is right that strike action is costly to the economy. He would also be right to observe that it has not stopped this Government proceeding with the reform of public service pensions, and with pay restraint in the public sector, too, to help deal with the enormous mess left to us by the Labour party.

Alison McGovern: With regard to the problems at RBS this week, my constituent David Robinson has been unable to access his funds, including disability allowance, from his account with thinkbanking. It is an internet-based bank that uses the RBS platform, so he could not go into an RBS branch to resolve his problems. Will the Minister please make contact with RBS about internet banking users and make sure that my constituents—and everyone else—are not unduly affected?

Mark Hoban: The hon. Lady makes an important point, and I spoke to Stephen Hester this afternoon to find out what progress RBS has made in resolving its issues. It introduced measures to help people who can access branches, but she makes a very important point about internet banking, and RBS is very keen to learn the lessons from those problems and to put in place contingency arrangements for the future. I encourage her to get her constituent to write to RBS, and, if he has suffered additional costs as a consequence of the situation, to make that claim to it.

Stephen Williams: Embarrassing revelations about celebrities’ tax affairs usually bring a flurry of people to their tax accountants, asking them to check whether their affairs are all in order. Will the Treasury ask HMRC to encourage people to come forward voluntarily now and confess to what they may be up to, rather than wait for an investigation into their tax affairs?

David Gauke: My hon. Friend makes a very good point, and I hope that all those who have engaged in aggressive tax avoidance schemes consider whether it is the right thing to do and reconsider their affairs.

Sheila Gilmore: One of my constituents was told by her department store employer that she either had to accept a 12-hour contract, which amounts to fewer hours than she works at the moment, or go fully flexible, which does not fit with her child care. Is it not time that the Chancellor decided to do another U-turn and to restore tax credits to those working couples who do not work up to 24 hours a week?

Chloe Smith: We on the Treasury Bench have argued many times in the House that it is fair to ask couples to work under similar requirements as lone parents, and I urge the hon. Lady to consider that in this case.

John Redwood: When will the House be given the details of the three very large schemes for monetary easing announced at the Mansion House, and when will we be given a chance to debate them?

George Osborne: It is standard practice for the Bank to announce its own monetary and liquidity schemes. That is what it did with the liquidity proposals, and the Governor of the Bank was answering questions about them this morning before the Treasury Committee in this House. When we have further details about the funding for lending scheme, we will of course come to the House and make that announcement, but I hope that my right hon. Friend will allow me to continue to make Mansion House speeches as Chancellors have before.

Tom Greatrex: The counter-party proposal and the levy control mechanism fall within the ambit of the Treasury. Within the past hour the Energy Secretary has told the Energy and Climate Change Committee, which is undertaking pre-legislative scrutiny of the Energy Bill, that he would welcome a Treasury Minister going before it to explain those proposals. Why is the Economic Secretary refusing to do so?

Chloe Smith: In correspondence with the Chairman of the relevant Select Committee, I have articulated that there is no precedent in the records that we can find for a Minister from one Department to assist in the scrutiny of another Department’s legislation.

Mr Speaker: Last but not least, the House—and the nation—can hear from Mr Simon Hughes.

Simon Hughes: Following the exchanges about tax avoidance and the Government’s very robust position, can one of the Treasury team tell us how soon we will have in place a system that targets not just celebrity individuals but all high-worth individuals, so that they all pay a decent share of tax to the nation?

David Gauke: HMRC already has in place a particular team that focuses on high-net-worth individuals; under this Government, we have also introduced a team that deals with not just the very top but the next band; and we are looking to introduce a general anti-abuse rule that will address tax avoidance—aggressive tax avoidance—more widely. This Government remain absolutely determined to ensure that people pay their fair share.

Rio+20 Summit

Nicholas Clegg: Last week, 196 nations met in Rio, 20 years after the original Earth summit. Our task was to find a way to set the world back on a sustainable path. Important progress had been made in the past two decades on reducing poverty and protecting our environment, but all in all, ambitions had not been met. Our dilemma was to agree ways to grow our economies without hoovering up or destroying our precious natural resources, recognising that our economic and environmental agendas must go hand in hand. Our challenge was to take the right decisions, not just for ourselves, but for the next generation which, in just 18 years, will need 30% more water, 45% more energy, and 50% more food.
	Was this summit an unqualified success on all those fronts? No, it was not—but few would have expected it to be. But we did make progress on the key areas that the UK sees as the priority for sustainable development and green growth. I pay tribute to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs for her commendable efforts at the summit itself and for her intensive preparations with the Secretary of State for International Development.
	At the summit, the United Kingdom Government played a crucial role in leading on four important shifts. First, while the Rio declaration was not all that we would have wanted, this is the first time that a multilateral document expressing such strong support for the green economy has been agreed. That in itself is a major achievement recognising that, in the long term, greening our economies should not conflict with growing them. The declaration helped to alleviate some of the fears of developing countries that green growth is a veil for a kind of eco-protectionism designed to stymie their development. It united nations behind the simple principle that, as US Secretary of State Hillary Clinton put it at the summit,
	“the only viable development is sustainable development which will deliver lasting progress for everyone.”
	Secondly, Rio+20 recognised that we need to develop broader measures of progress to complement GDP in order to take account of the natural assets that will contribute to future prosperity—so-called GDP-plus. In the UK we have already committed to including natural capital within our system of national accounts by 2020. We worked hard at the summit to ensure that all nations present recognised the importance of broader measures of environmental and social wealth to complement GDP.
	Thirdly, we agreed to set up the sustainable development goals—a concept proposed by Colombia. I was one of the first to welcome this idea when President Santos visited London in November. The UK has been pushing hard to secure agreement ever since, and achieving it, even at this high outline level, was no mean feat. The UN Secretary-General, Ban Ki-moon, said that the SDGs should draw on the success of the millennium development goals and should be an integral part of the post-2015 development framework. We would have liked to see specific themes agreed, focusing on ensuring that everyone can access enough food, energy and water, but getting such agreement was always going to be a huge
	undertaking. The UK Government will continue to keep up the pressure for rapid agreement. From now on, the process must be coherent and co-ordinated with the work of Secretary-General Ban’s high-level panel on the post-2015 framework, which the Prime Minister will co-chair along with the leaders of Liberia and Indonesia.
	Fourthly and finally, at Rio national Governments recognised the importance of working alongside businesses. Thanks in no small part to the leadership of UK firms, Rio recognised the role of corporate sustainability reporting to their shareholders and to prospective investors—something that would have been inconceivable even a year ago. I also announced in Rio that we will be the first country anywhere to mandate large companies to report on their greenhouse gas emissions. A growing number of companies and investors are realising that their own success is directly linked to sustainable, green growth. We hope that the call from all nations for businesses to report their sustainability performance will usher in a new era of transparency and consistency in the global business community.
	In summary, although Rio+20 did not go as far as we would have liked, it revived a global commitment to an agenda that has come gravely under threat. Progress was made in the areas where progress needed to be made. The declaration agreed by all 196[Official Report, 3 July 2012, Vol. 547, c. 7-8MC.] countries should not be seen as the upper end of our ambition; it should be our baseline and we should all strive to surpass its expectation. We must build on the steps that were taken to reinvigorate the drive for sustainable development and lasting growth.
	The UK played a leading part last week because we are on track to deliver our commitment to spend 0.7% of gross national income on official development assistance to developing countries from 2013; because I announced the adaptation for smallholder agriculture programme, which will improve the lives of more than 6 million smallholder farms; because we are taking the lead in areas such as reproductive health and family planning; because we are the first country whose major businesses will report their greenhouse gas emissions as part of their annual accounts; and because of the range of ways in which we are greening our economy. We will remain committed to working with our partners and will be ambitious for the future. The summit is over but the work continues, and the UK will continue to lead from the front.

Mary Creagh: I thank the Deputy Prime Minister for the advance copy of his statement.
	The original Rio declaration sought to eradicate poverty, reduce unsustainable production and consumption, and promote greater co-operation to protect the world’s ecosystems. It is as relevant today as it was 20 years ago. Expectations were low for this summit, and those expectations were met. I pay tribute to the Deputy Prime Minister and the Secretary of State for Environment, Food and Rural Affairs, who worked as part of the EU delegation to prevent the summit from reaching abject failure.
	There was a glimmer of hope. Ban Ki-moon’s zero hunger challenge aims for a future in which everyone enjoys their basic human right to food and in which global food systems are resilient. It aims to provide
	access to adequate food all year round, increase small farm productivity and see zero waste of food. We welcome the UK’s contribution of £150 million to help meet the zero hunger challenge.
	Will curbing land grabs by large companies and improving land rights, especially for women, be on the agenda of the high-level meeting on hunger that will take place during the Olympics? What does the Deputy Prime Minister make of the Prime Minister’s comments yesterday that a future Conservative Government would consider handing out some state benefits “in kind” rather than in cash? Does he think that handing out food vouchers to the poor is a good idea, when the Brazilian zero hunger scheme was based on the Bolsa Família, which gave money directly to families in poverty and let them choose how best to feed their children? How will the zero hunger initiative tackle food poverty in the UK, where the Trussell Trust charity estimates that it will feed 130,000 people this year, 45,000 of whom are children?
	The Deputy Prime Minister mentioned that the Prime Minister, alongside the Presidents of Liberia and Indonesia, will co-chair a new UN committee to establish a new set of millennium development goals to follow those that expire in 2015. How will the new goals relate to the sustainable development goals that will emerge from Rio?
	There was progress in the field of energy, with the Secretary-General’s sustainable energy for all initiative, which received pledges of $323 billion in funding to bring clean energy to more than a billion people in developing countries. We welcome that. We also welcome the Deputy Prime Minister’s announcement at Rio that the UK will introduce carbon reporting for 1,800 quoted companies from April next year, as set out in Labour’s landmark Climate Change Act 2008. That was, sadly, the weakest option that the Government consulted on. It creates the anomaly that British Airways will report its carbon footprint as a public company, but that Virgin Atlantic, as a private company, will not. However, we are the first country in the world to do it, which gives us a temporary, green competitive advantage to make up for the Government’s disastrous handling of the solar feed-in tariffs.
	The agreements on biodiversity, oceans and the trade in endangered species are welcome. However, the Government have refused to guarantee funding for the UK’s wildlife crime unit after next April. Does he agree that that unit is on the front line of fighting the illegal trade in endangered species, and will he argue for its benefits at the heart of Government?
	Sharing the benefits of the planet’s biodiversity equally is an important building block for what happens after Rio, yet the Government have still not ratified the Nagoya protocol, which was agreed last year, on access to and benefits from genetic resources. What assessment has he made of the action we need to take to comply with the protocol, and will the Government show leadership in the EU by ratifying it?
	We know that sustainable development starts at home. Far too often, the Government have been found wanting—they abolished the Sustainable Development Commission and failed to introduce marine protected areas, and their implementation of their forests policy was disastrous.
	Will the Deputy Prime Minister therefore tell the House how the Government will change how they do business to reflect the Rio conference outcomes?
	Will the Government publish a UK action plan as a framework for the changes that they seek after Rio? Does the Deputy Prime Minister agree with his right hon. Friends the Secretaries of State for Environment, Food and Rural Affairs, for International Development and for the Foreign Office that the Government need to invest more in a resource efficient economy and low-carbon jobs to reduce costs and protect the UK from rising oil prices and energy dependency?
	The Deputy Prime Minister should be in no doubt that the Opposition will work with him across party boundaries to achieve the long-term solutions that our planet needs. Rio showed that the solutions to ending hunger and deforestation, and to securing clean energy and water for the poorest, are all out there. We just need to scale them up.
	The scientists tell us we must act now and businesses stand ready to play their part. The tragedy is that the politicians did not agree concrete mechanisms by which those things can happen, but as the Deputy Prime Minister has said, Rio was not a destination but a milestone on a long road. We stand ready to support the Government to make the change we need to deliver the future we want.

Nicholas Clegg: I thank the hon. Lady for her recognition of what I think is our shared commitment to the agenda discussed at Rio. I totally share her support for the zero hunger initiative; I attended a session in Rio at which the initiative was discussed. She asked about the hunger summit that will be held this summer. I do not know the precise agenda, but she referred to the importance and legal rights to property and land, which are crucial to dealing with hunger sustainably.
	The hon. Lady asked about the interaction between sustainable development goals, ill-defined though they were at the Rio summit, and the work on the post-2015 agenda. The Government’s strong view is that the sustainable development goals as defined by the group of 30 representatives, which will be established in September, must feed into the wider review of the millennium development goals through the high-level panel that has been established by the Secretary-General.
	I will not disguise from the hon. Lady the fact that within that procedural complexity, there are a lot of sensitivities. Candidly, some developing countries have hitherto felt that their voice is not strongly enough heard in some UN processes. The Prime Minister and his co-chairs will work hard to ensure that the voices of the developing world are properly listened to in the review of the MDGs to allay the concern that precisely the part of the world that will benefit most from the process is shut out from it. We need to do quite of lot of work to ensure that the different acronyms and processes do not start becoming rival acronyms and process—that is a danger.
	The hon. Lady mentioned the sustainable energy for all initiative, which I am glad she supports; it is an outstanding initiative. I hosted a preparatory meeting of the group on the initiative in London some months ago. We had hoped that the Rio declaration would
	adopt the initiative as a core conclusion. In the event, because of the nervousness of some participants on what the initiative means and its implications, it was “recognised” in the declaration. We would have inserted a stronger verb, but none the less, as with all those initiatives, we now need to exploit that recognition and work on it.
	The hon. Lady complained that the proposal on greenhouse gas emissions reporting does not go far enough. We have to start somewhere. We are the only country doing this. Some people complain that we have already gone too far and are imposing too many burdens on business. Other business groups, such as the CBI, have welcomed the proposal. I think we are breaking new ground, and I hope she will welcome that rather than cast aspersions on it.
	The hon. Lady will know that the Darwin initiative is a robust initiative that we are using to monitor the plight of endangered species. Finally, she rightly said that these summits make sense only if one acts consistently with them at home. We are rightly proud of our record: we are the first country to establish a green investment bank; the green deal, which will be up and running in the coming six to eight months or so, will be the largest initiative of its kind for installing energy efficiency measures and bringing down energy bills in homes up and down the country; and the green sector, the green economy, is growing by about 5% a year, employs close to 1 million people in this country and actually runs a trade surplus. That is something we should cherish and celebrate. The carbon floor price is another major innovation of the Government, while the electricity market reform, which is one of the most ambitious legislative and regulatory overhauls of an electricity market I am aware of anywhere in the developed world, is explicitly designed to ensure that we have a sustainable energy mix for future generations.

Anne McIntosh: I congratulate everyone involved on what was a genuine team effort. Will the Deputy Prime Minister assure the House that one of Rio’s lasting legacies will be the agreement to reaffirm a universal, open, non-discriminatory and equitable multilateral trading system for food and agricultural products? Will he give an undertaking that we will really push for Doha to deliver this through the World Trade Organisation?

Nicholas Clegg: No one is in any doubt that one of the greatest boosts to prosperity across the world would be a successful completion of the very, very, very, very long-awaited Doha development round. It is immensely frustrating that getting agreement on it has proved so elusive. Many have written it off altogether, and it is difficult not to be pessimistic about it, but that does not mean that we should not continue to pursue the cause of multilateral trade liberalisation.

Peter Hain: Given the frustratingly disappointing outcome of Rio and the crisis of investor confidence in solar PV, onshore wind and nuclear in Britain, is it not even more important that the Deputy Prime Minister joins the growing cross-party support for the Severn barrage, which would generate 5% of the
	electricity in Britain and create nearly 40,000 jobs—a green project that will deliver the Government’s renewable energy commitments?

Nicholas Clegg: I pay tribute to the fervour with which the right hon. Gentleman is throwing himself into this new cause in a political career of many great causes. I agree with the underlying assertion that for investors to make investments in major energy infrastructure of whatever kind, they need long-term stability and long-term certainty about the direction of Government policy. That is precisely what the electricity market reform aims to provide.

Zac Goldsmith: Despite the prominence given before the conference to protecting the world’s oceans in the face of the ongoing collapse in world fish stocks and the continued obliteration of coastal livelihoods, it has been widely reported that the concrete steps put forward were effectively blocked by Russia, Canada and the US. Is that true? If not, what specific steps were agreed?

Nicholas Clegg: In many ways, it is actually more dispiriting than the hon. Gentleman suggests, because we did not manage to get any agreement on any of the themes governing the sustainable development goals. Sensibly, perhaps, in view of the dynamics at Rio, that has been left for the working group in September. On the plus side, from his point of view, the text reflects the importance of oceans and their sustainable use, and I would be surprised if oceans did not feature prominently in the final shape of the sustainable development goals as they are crafted in the months and years ahead.

Joan Ruddock: The Deputy Prime Minister will have heard my hon. Friend the Member for Wakefield (Mary Creagh) mention the Nagoya protocol, which, as he knows, has not been ratified. He knows how important it is to access and benefit sharing. Will he undertake to meet his EU counterparts in order to move forward the EU position on this matter, which is truly critical?

Nicholas Clegg: We certainly want to see full ratification of the Nagoya protocol. It is something that this country has done, and I know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is working with her counterparts in the European Union to encourage those who have not yet taken the necessary steps to do so. To make one observation, the Nagoya protocol flowed from the original Rio+20 summit, but it was not agreed at that summit. The only reason why I make that point is that, for those who say that an insufficient number of legal texts were agreed this time around, it is worth recalling that the history of the last Rio+20 summit was that, while it was much more substantive than this one, it did lead and create a momentum that subsequently led to legal texts. I say to those who have responded with complete despair about this summit that it is now a matter of what we do with it and whether we can turn it into legally binding documents, which is the challenge for the future.

Peter Lilley: Within the privacy of this Chamber, will the Deputy Prime Minister admit that Rio actually showed that it is
	now blindingly obvious that no other major country proposes to follow us in imposing a legally binding obligation to cut emissions by 80% at a cost of £430 billion to our economy, so we should discreetly shelve the Climate Change Act 2008 as soon as possible?

Nicholas Clegg: My understanding is that Mexico has done just that, just now, so it is not right to say that countries are not seeking to follow our lead. In my bilateral discussions with members of the Brazilian Government, I was struck by how forceful they were, as a major emerging economic power, in expressing the view that their own future success would be defined by their ability to grow sustainably, which would require a departure from simply copying how development has been pursued in the past. I am afraid that I do not share the right hon. Gentleman’s pessimism about the virtues of, and potential for, sustainable growth in the future.

Caroline Lucas: The final text from the Rio summit effectively sells out the vision of a green economy by replacing the usual phrase “sustainable development” or even “sustainable growth” with a phrase of a quite different meaning—“sustained economic growth”. Given that Kenneth Boulding has famously written:
	“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist”,
	will the right hon. Gentleman tell us whether the problem at Rio was too many madmen or too many economists?

Nicholas Clegg: I will not choose which. I think the hon. Lady is selecting somewhat partially from a mammoth text, which refers to “sustainable growth” and “sustainable development” throughout and in almost every paragraph. She has been a little partial in her selection of those two words. The whole assumption behind Rio was an overt recognition that it is senseless, and unfair on future generations, our children and our grandchildren, to grow today and clean up later. That fundamental development dilemma, whereby development is pursued at the cost of the sustainable use of resources, was at the heart of Rio thinking before the summit and during it, and it must remain part of our thinking subsequent to the summit as well.

Simon Wright: The agreement at Rio for a new high-level political forum on sustainable development could provide the leadership that has been lacking in the past for the implementation of declarations and action plans. Will the UK Government do all they can to ensure that the new forum has a wide agenda, a clear mandate to act and high-level political backing?

Nicholas Clegg: Yes; I think there is great potential for that forum to do good work. Given that all these forums are working on agendas to which we have made a great commitment as a Government, we will remain committed to their successful work.

Joan Walley: In thanking the Deputy Prime Minister and the Secretary of State for their work at Rio and notwithstanding the outcome, will the right hon. Gentleman commit to an early appearance before the Environmental Audit Committee, so that all the different strands of all the different
	groups that want urgent action now, but did not get that reflected in the high-level agreement, and this UK Parliament and its legislators can map out a way of taking urgent action and ensuring that it is followed up?

Nicholas Clegg: I thank the hon. Lady for her invitation, and I will think about it carefully. I know that my right hon. Friend the Secretary of State has attended her Select Committee. She is right, of course, to say that the Committee plays a crucial role in mobilising the opinions of many groups—non-governmental organisations and others—which take an interest all this. I hope that she recognises—as I know she was there—that the Government made considerable efforts to talk to all those groups on an ongoing basis, notwithstanding their evident disappointment in the outcome of the summit, and we will of course continue to do so.

Paul Uppal: There is great news about the economic development of sub-Saharan Africa, which is a possible portent for the future but is also a double-edged sword, because that development is built on the back of natural and mineral resources. Can my right hon. Friend assure me that the UK will continue to take a lead on sustainability, and will tackle concerns about eco-protectionism head-on?

Nicholas Clegg: That is one of the issues that were raised forcefully by many of the leaders from Africa. I had a meeting with President Meles of Ethiopia, who is a leading thinker on all these matters. He recognises, in a way that I think is pretty far-sighted, that notwithstanding the challenges that his people now face, he will be doing a disservice to them and, indeed, to future generations of Ethiopians if they do not use the resources that are available to them in a sustainable fashion.

Ben Bradshaw: The hon. Member for Richmond Park (Zac Goldsmith) was right to identify as particularly depressing the total failure to make any progress on the second biggest environmental issue that affects us—the need to protect our marine environment—but would not Britain have more credibility in terms of leadership if we were not already two years behind in establishing our own network of marine protected areas, and if the Government had not drastically reduced their number so as to render them almost useless?

Nicholas Clegg: I think that it was right for us to take the extra time to secure a firm evidence base in regard to those areas. We are not abandoning the agenda; we are trying to do our job as thoroughly and rigorously as I know the right hon. Gentleman would expect.

John Redwood: The UK hit the Kyoto targets, while a number of our leading European Union competitors signed up with a fanfare but came nowhere near hitting them. Is there any sign now that those European big energy-using countries will do better in the future?

Nicholas Clegg: My own view is that any developed economy will serve itself best by moving towards an energy mix that is diverse, sustainable, and
	not over-reliant on unreliable forms of energy and very volatile global prices. I think it is a good thing that we have been leading that agenda in this country while also meeting our Kyoto targets. Those activities are not inconsistent with each other, and I personally rebut the idea that a shift of that kind is incompatible with highly competitive economies.

Barry Gardiner: I welcome the frankness with which the Deputy Prime Minister delivered his statement on the outcomes of Rio, which were not what we could all have wished for. I think he recognises that one of the real strengths of the processes surrounding Rio is what is happening at national level. In that context, would he care to comment on the success of the world summit of legislators, which was held during the weekend before the high-level session, and on the progress that was achieved there at national level? He referred to Mexico, but there has also been progress relating to natural capital, the marine environment and deforestation.

Nicholas Clegg: I pay tribute to the hon. Gentleman for his work in GLOBE International, the world legislators’ forum. It was very helpful to me in Rio to listen to his views about the work of that body. I strongly agree with him: I think that some Governments and Parliaments sometimes struggle to know exactly what legislative steps they should take in this regard. The establishment of best practice for them, via GLOBE, on a range of sustainable development issues can serve as an important catalyst to ensure they do not just talk the talk, but walk the walk.

Andrew George: I congratulate my right hon. Friend and his ministerial team on pushing the summit further than I suspect it would have gone without them, although the outcomes themselves were very modest. Does he agree, however, that although binding agreements and legislation were never going to be part of the final outcome, we should welcome the fact that the summit put genuine sustainability back on to the agenda, and also set out a vision for its delivery?

Nicholas Clegg: Yes. The breakthrough, conceptual though it is and not concrete enough, is that 196 countries are saying overtly and explicitly, “We think development needs to be resource-sustainable and we want to craft sustainable development goals.” However, in a sense, this is a concept without sufficient content. The test of whether it will be looked back on as a complete wash-out or a great triumph is what we then do with that outline concept, and whether we have the political will to use the mechanisms that have been established—not least the group that will start work in December—to flesh out the content and feed that into the wider review of the millennium development goals as they are reviewed and strengthened in the post-2015 framework.

Michael Weir: The Deputy Prime Minister has been very candid about the limitations of the declaration from Rio, but he urges us to strive to surpass his expectation. Does he any specific ideas about what the UK might do in this respect? In particular, has he thought about following the Scottish Government’s example of establishing a climate justice fund?

Nicholas Clegg: As the hon. Gentleman may know, we have not only set an international precedent by, for instance, announcing that some of the largest companies will be abiding by new greenhouse gas emission reporting requirements; we are also setting the pace by moving towards what I referred to in my statement as GDP-plus by 2020, whereby we do not just take a snapshot of our nation’s wealth and prosperity, but try to include in that new measures of the resources we are using and their sustainability. We have established a natural capital committee, chaired by Professor Dieter Helm, which I think is the first of its kind. Those are not only institutional but methodological innovations that are genuinely world beating, and I very much hope that other countries will follow our lead.

David Nuttall: Does the Deputy Prime Minister agree with Mr Kandeh Yumkella, the joint head of the United Nations “sustainable energy for all” initiative, who said:
	“You can’t save the forest if you don’t have gas”?
	Consequently, this country ought to expedite the use of our shale gas reserves in order to reduce domestic energy prices.

Nicholas Clegg: As the hon. Gentleman may know, the Chancellor announced at the Budget that we would be developing a gas strategy. Our overall approach to energy policy as a Government is to make sure that the sources of energy we rely on are as diverse and sustainable as possible, and clearly, gas plays an important role in that. That is why we are committed to producing this new gas strategy.

Mark Hendrick: The Deputy Prime Minister referred in his statement to the commitment to providing 0.7% of GNI for development assistance. All three major political parties would like to put that commitment into law. Why, therefore, did the International Development Secretary—he is in his place next to the right hon. Gentleman—categorically refuse point blank to support my private Member’s Bill? Members of both parties in the coalition have said that they will support the Bill, and doing so would save parliamentary time and get it through sooner, rather than later.

Nicholas Clegg: As the hon. Gentleman knows, the response to his private Member’s Bill is a matter for the House. I should point out to him that if he attaches such significance to legislating on this issue, why on earth did his party not do it in 13 years in office? We are very clear that we will be delivering our commitment to allocate 0.7% of GNI from next year, and that we will legislate as soon as we possibly can.

Graham Stuart: Across the world at national level, legislators are effecting environmental change and improvement, even as intergovernmental processes stall. Further to the Deputy Prime Minister’s reply to the hon. Member for Brent North (Barry Gardiner), will he support the GLOBE world summit of legislators process going forward, so that, from Mexico to China in the past, and other countries in the future, we can see action today, rather than words at summits?

Nicholas Clegg: As I explained in my meeting in Rio, I am intuitively a big supporter of GLOBE, as I think it is far better if these summits are not just a get together of Presidents, Prime Ministers, Deputy Prime Ministers and Ministers, but involve legislators; they should not just be a great big club of the Executive. The more we can involve legislators and Parliaments, the more we can guarantee that action is subsequently taken. I am very happy to look at ways in which the Government could provide more support, in as much as we can, to the excellent work that GLOBE has already undertaken.

Nia Griffith: Following Rio+20, I am sure that we all agree that fine words need to be backed up with practical actions, so could the Deputy Prime Minister tell me what safeguards his Government will put in place to ensure that, with the growing number of biomass-fuelled power plants, imported biomass material comes from genuinely sustainable sources and is not contributing to deforestation and loss of biodiversity?

Nicholas Clegg: My understanding is that there are European Union standards that seek to ensure that the biomass industry adheres to basic environmental standards, but it is one industry of many in which this Government are keen to ensure that there is more, rather than less, investment, in order that we get the diverse mix of energy sources and energy generation that I referred to earlier.

Martin Horwood: I commend my right hon. Friend and the Secretary of State on the positive stand taken by Britain in Rio, but given the lack of any landmark agreements comparable to the original Earth summit, how can Britain now promote rapid, timetabled agreement on issues such as GDP-plus and the sustainable development goals?

Nicholas Clegg: The SDGs, which are the core commitment at Rio, do have fairly clear procedural timetables; a group of 30 representatives will be established in September, and the UN Secretary-General has been clear that that must feed into the wider post-2015 millennium development goals process. There is a pretty clear process. However, we just have to recognise that a summit in a world where power is shifting to different hemispheres and different continents is different from one that took place 20 years ago. Brazil now has authority and clout on the international stage that it did not have then; the G77 is organised as a caucus of developing countries, which was not quite the case 20 years ago, and they are rightly more demanding that their voice and voices should be heard. That is reflected in the more diverse push and pull that we witnessed at the Rio summit.

Mark Lazarowicz: One of the areas of disappointment was the failure to move forward on measures to improve access to water and sanitation for the many millions in the world who do not have that. Given that, and given that I know the Government are committed to that objective, what steps will they take in other international bodies to try to promote the objective of improving access to water and sanitation throughout the world?

Nicholas Clegg: I agree with the hon. Gentleman that that is one of the most important issues, as we see from the shocking and scandalous figures on the number of children and women, in particular, who have died because of poor sanitation and restricted access to clean water. It was one of three themes—food, water and energy—that we had hoped would be defined in greater detail under the rubric of the sustainable development goals at Rio. We will continue to push to do that as they are defined in greater detail in the months ahead.

Points of Order

Mary Creagh: On a point of order, Mr Speaker. During yesterday’s urgent question on flooding, I asked the Secretary of State for Environment, Food and Rural Affairs what support Calderdale council could expect to receive under the Bellwin scheme to fund both its emergency response and its recovery effort. In her reply, she said that
	“the trigger for the Bellwin formula is 15% of a local authority’s income”.—[Official Report, 25 June 2012; Vol. 547, c. 25.]
	That did not sound right to me, so I went to the House of Commons Library and discovered that the trigger is in fact just 0.2% of a council’s annual income; that triggers a reimbursement from central Government of 85% of the costs incurred. Would you like to invite the Secretary of State to comment and correct the record on this matter?

Mr Speaker: Clearly this is a key point in the mind of the shadow Secretary of State. As the Secretary of State is with us and literally on the edge of her seat, let her come to the Dispatch Box and respond if she so wishes.

Caroline Spelman: This just shows what we all know in the House: when it is not one’s departmental brief, one probably should not venture an opinion. The hon. Lady has informed the House of this matter. The 15% figure that was in my mind when answering the urgent question comes from the amount that is then disbursed to the local authority. I have taken
	the matter up with the Department for Communities and Local Government, but what matters is that the council gets help if it is entitled to it.

Mr Speaker: We are grateful to the Secretary of State for that acknowledgement and explanation, which is very helpful.

Julian Lewis: On a point of order, Mr Speaker. Although, sadly, the Deputy Prime Minister is no longer with us—corporeally, at any rate—I was concerned, as I trust you were, at the widespread reports in the weekend press that he had vetoed any prospect of a referendum on the possible introduction of a proportional representation voting system for elections to a reformed upper House. Given the constitutional importance of such an issue and the motivation that it is clearly designed to help the Liberal Democrats retain a permanent stranglehold on future legislative processes, should not such announcements be made initially to this House rather than via the media?

Mr Speaker: That was a scintillating polemic for the House to savour, but what I would say to the hon. Gentleman, whom I have known for 29 years this October, is that although the logic of his attempted point of order is compelling, it suffers as a point of order from the disadvantage that the premise on which the logic has been built is, in my judgment, misplaced. The reason I say that to the hon. Gentleman is that the Deputy Prime Minister was not announcing a change of Government policy but, as far as I can tell, merely reiterating the status quo. That will have to do for now, but all these matters will doubtless be explored eloquently, in detail and at length in the upcoming debates on House of Lords reform, to which I fancy the hon. Gentleman will wish to contribute.

Opposition Day
	 — 
	[3rd Allotted Day]

Secondary Education (GCSEs)

Mr Speaker: I inform the House that I have selected the amendment in the name of the Prime Minister.

Stephen Twigg: I beg to move,
	That this House notes the forthcoming consultation on the restructuring of the secondary education system; further notes the proposals reported in the press on Thursday 21 June of Government plans for replacing GCSEs with an O-Level and CSE system; believes that these proposals could, in the words of the Deputy Prime Minister, ‘lead to a two tier system where children at quite a young age are somehow cast on a scrap heap’; and calls on the Government to ensure any proposal for changes to the secondary education system are subject to approval by the House.
	In three years’ time, the education leaving age will rise to 18. That change represents a huge challenge to schools and colleges up and down the country. How can the education system adapt to the challenge? How can we enable all children and young people to achieve their full potential? How do we ensure that young people have the skills and knowledge to succeed in life, including in the world of work?
	Earlier this month, the Secretary of State was advocating a return to Victorian-style rote learning in our primary schools. Now he wants to bring back a two-tier exam system, which his own party abolished more than 25 years ago. That is all from a Government who are making the biggest cuts to education spending since the 1950s. I am a great supporter of history, but I do not believe that we need a school system that is stuck in the past.
	The Opposition believe in stretching the most able students. We believe in rigour, high standards and opportunity for all students in all subjects, academic and vocational.

Several hon. Members: rose —

Stephen Twigg: I will give way shortly, but I want to develop my argument first.
	The most important ingredients of success in education are the quality of leadership and the quality of teaching and learning; the Secretary of State is nodding his assent. It is vital that those ingredients are backed by a credible set of qualifications. We support reforming the structure of the examination system to deal with unhealthy competition between exam boards. If that means a single exam board, we will consider those plans in detail, and I understand that the Select Committee is due to make proposals to deal with that precise challenge shortly. Sensible, thought-through and evidence-based measures to increase rigour and tackle grade inflation will have the full support of the Opposition, but let us be clear about the fundamental difference between us and the Education Secretary: the proposal to divide pupils at 14 into winners and losers.
	When the Deputy Prime Minister woke up in Rio last Thursday, he said about the Secretary of State’s proposals:
	“I am not in favour of anything that would lead to a two-tier system where children at quite a young age are somehow cast on a scrap heap. What you want is an exam system which is fit for the future”
	and
	“doesn’t turn the clock back to the past…so it works for the many and not just…the few.”
	I agree with that sentiment. The question for Liberal Democrat colleagues is whether they have the courage to vote for our motion, which supports the words of their leader.

Alok Sharma: Labour made a real difference to our education system—there is no doubt about that. However, at the same time as grade inflation was on the rise we were dropping in the international league tables on maths, English and science. Should not the hon. Gentleman be apologising for the disservice he has done to our young people, or is he now championing mediocrity once again?

Stephen Twigg: Well read, I suppose. I must correct my earlier remark when I referred to Liberal Democrat colleagues because I think there is only one Liberal Democrat Member in the Chamber. [Hon. Members: “Two!”] Sorry, there are two. I was going to comment on the absence of the Liberal Democrat Minister of State, Department for Education, the hon. Member for Brent Central (Sarah Teather), but we have instead the Liberal Democrat Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne). I think the percentage would be just under 2%—that is my calculation.
	Last week, the Daily Mail, in a leaked story, reported:
	“None of the plans require an Act of Parliament.”
	This week, according to the Government’s amendment on the Order Paper, the Government are calling for proposals that are approved by Parliament. May I welcome yet another U-turn by the Government to give Parliament a proper say, but may I suggest that as well as changing the process, the Secretary of State should change the substance of these leaked proposals? Today’s debate provides the House with an opportunity to reject a move to bring back a system that was created in the 1950s and abolished in the 1980s.
	These proposals were leaked just as pupils were sitting their GCSEs. As nervous and stressed young people were queuing up to sit hugely important exams, the Secretary of State was saying that those exams were worthless. How insulting to young people who have studied and revised so hard. How insulting to parents who have helped their children through the stress of exams and how insulting to our brilliant teachers who have worked so hard to prepare their pupils. Why are these changes being made now and why are they being rushed? Is the Secretary of State concerned that his other policies will result in a fall in school standards? Is it that he needs to mask the reduction in standards by abolishing the main existing measure of secondary school results? Is that why the Government are so determined to do this?

Jake Berry: In 2004, when the hon. Gentleman was criticised for putting a cake decoration qualification on a par with GCSE
	maths he called it “educational snobbery”. Does he stand by those comments? Does he still believe that cake decorating is equivalent to GCSE maths?

Stephen Twigg: I have never believed that cake decoration is equivalent to GCSE maths, and I certainly think the hon. Gentleman should come up with better interventions than that.
	These plans are nothing less than a cap on aspiration. When he introduced the GCSE in 1984, the then Conservative Secretary of State, the late Lord Joseph, said the new system would be
	“a powerful instrument for raising standards of performance at every level of ability.”—[Official Report, 20 June 1984; Vol. 62, c. 304.]
	Last week, the hon. Member for Beverley and Holderness (Mr Stuart), the distinguished Conservative Chairman of the Select Committee on Education, said that the Secretary of State is
	“setting out a policy that appears to be more focused on the brighter kids…and not focusing on the central problem we have which is doing a better job for the children at the bottom.”
	The Government amendment this afternoon claims that they want “high standards for all” to boost social mobility, but the proposals leaked to the Daily Mail admit that 25% of “less-able pupils”—about 150,000 a year, every year—would take
	“simpler qualifications similar to old-style CSEs”.
	Last week, Lord Baker, another Conservative former Education Secretary, said that the certificate of secondary education was
	“a valueless bit of paper. It was not worth anything to the students or the employers.”
	How will writing off a quarter of young people boost social mobility and standards for all?

David Lammy: Does my hon. Friend recognise the scenario in, I think, the first year in which the GCSE was introduced, where many working-class children in inner-city contexts were streamed off to the CSE and then went on to the failed youth training scheme? We do not want that scenario back in our inner cities. We need to ensure parity for all at 16.

Stephen Twigg: My right hon. Friend is absolutely right and anticipates my next point. We know from analysis of the CSE that it was, in practice, a school-leaving certificate for the poor. In the decade after its abolition, the number of the poorest pupils staying on at school after 16 increased by a very significant 28%. The CSE and O-level system was designed more than half a century ago, when our society was completely different—there were far more unskilled jobs and typically children were split off into grammar schools and secondary moderns. A pupil at a comprehensive in 1971 was 25 times more likely to take CSEs than a grammar school pupil—perhaps not surprising. A pupil in a secondary modern school was 50 times more likely to take CSEs than a grammar school pupil.

Elizabeth Truss: Does the hon. Gentleman agree with me that the world’s skills are increasing and we need to compete? Can he explain why, under the Labour Government, in 2000 we were ahead of Germany in the maths league table, but
	by 2009 we were 12 places behind Germany? What did he do when he was in government to raise standards in vital subjects and compete with other countries?

Stephen Twigg: First, how would this solution help? As the hon. Lady knows, there are different international comparisons and analyses. The study carried out by the programme for international student assessment, PISA, to which she refers, shows one thing, but the trends in international mathematics and science study, TIMMSS, shows something quite different: English results in mathematics are much better in TIMMSS than in the PISA study. I take the challenge she sets out very seriously—we do need to do more and I am in favour of more rigour. What I do not understand is why that cannot be done by reform of the GCSE system. We can make GCSEs more rigorous. We do not have to go back to dividing children into sheep and goats at 14.
	The hon. Lady is an authority on these matters and I pay tribute to her hard work, especially on mathematics. The number of young people taking mathematics at A-level started to increase significantly under the Labour Government. We need to do more to accelerate that trend and to explore all the ways we might do that, but surely she welcomes the fact that the number taking A-level maths increased under the Labour Government?

Elizabeth Truss: In fact, there was a massive drop in the number of students taking maths in 2000, when Labour introduced modular exams; that had a massively damaging effect. That number is now beginning to recover, which is indeed good news, but does the hon. Gentleman agree that the previous Government were responsible for the drop in the first place and the decline in standards relative to countries such as Germany? He still has not answered my question about how Germany managed to reform its system.

Stephen Twigg: Let us learn from other countries’ systems. That is the point I was seeking to make. We recognised that there was an issue, which is why we addressed it and why, as the hon. Lady acknowledged, the number taking maths at A-level has started to increase, and not just since the change of Government in 2010; it predated that change of Government. When we debate these topics, it is important that we are balanced in our use of evidence. I am prepared to acknowledge the issue that she outlined as regards PISA, but I am sure she could acknowledge that we do a lot better in some of the other international research, including TIMSS.
	The Financial Times has done an in-depth analysis of the proposed new CSE. It says that it
	“will tend to be an exam for poorer children”.
	It goes on to say:
	“There will be a geographical effect, too, with some areas switching heavily to it. . . The CSE will be a northern qualification”.
	This matters. The Secretary of State is in danger of putting a cap on aspiration for poorer children and for those living in the poorer regions of the country.
	In last week’s urgent question the Secretary of State told the House that we already have a two-tier system, but he knows that at present pupils who sit the simpler foundation papers for GCSE can still get a C. Indeed, if their coursework is good enough, they can even get a B.
	With the CSE system, they will have a qualification on their CV which suggests to employers that teachers thought they had low ability. There is a real danger that they will simply stop striving for success.
	The Labour Government started to narrow the gap in education between rich and poor. These proposals pose a real threat that the north-south divide will worsen and even fewer young people from the poorest families will stay on at school or go on to university. I am sure the Education Secretary has read the OECD’s research, which concluded that social mobility is lower in countries which
	“group students into different curricula at early ages”.
	Most scientific evidence now shows that teenagers’ brains can change late in life, even up to the age of 16. Professor Cathy Price of University college London found that teenagers’ IQs can jump by as much as 20 percentage points. She comments:
	“We have to be careful not to write off poorer performers at an early stage when in fact their IQ may improve significantly given a few more years.”

Gavin Barwell: I am grateful to the shadow Secretary of State for giving way and I apologise for dragging him back slightly, but before we go on to talk about what the solutions might be, it would helpful to have some clarity about where we start from. Does he believe that an A grade at GCSE when it was introduced was equivalent to an A grade at O-level, and that it is easier to get an A grade at GCSE today than it was back in 1988?

Stephen Twigg: I absolutely acknowledge that there is grade inflation in the system—[Hon. Members: “Ah!] and I have said that previously. The “Ah!”s are very welcome, but it is not something that I have not said before, and I have said today that we will support measures that root out grade inflation. We will support sensible reform of the examination boards because there is a good argument that a kind of competition to the bottom has contributed to grade inflation.

Helen Jones: Does my hon. Friend agree that experience in teaching shows that it is very difficult to predict at the age of 14 exactly where a young person will be at the age of 16? Is not the problem with the Government’s proposal that there is no way of deciding at that age exactly what a child’s performance will be in two years’ time?

Stephen Twigg: Absolutely. My hon. Friend has struck at the heart of the debate and at the heart of where the Opposition differ from the Secretary of State. We cannot write young people off at 14, for the reasons that she set out.

Several hon. Members: rose —

Stephen Twigg: I shall make a little more progress, then I will take a couple more interventions. I know that there are a number of hon. Members who want to speak in the debate as well.
	I am, as I have just said, open to sensible ways of improving the GCSE system. We know from businesses and employers organisations that they want an examination system that provides young people with the skills that reflect the needs of the modern economy. The recently published annual CBI education survey shows that
	businesses want our schools to focus on employability skills, presentation skills and practical skills, critical thinking and team working, as well as the crucial foundations of literacy and numeracy.
	I was one of those who took O-levels. I know that I do not look old enough. I was just waiting for a Conservative Member to make that point.

David Evennett: Give us the results.

Stephen Twigg: I will write to the hon. Gentleman with the results. I took O-level English. I think I got an A in literature and a B in language. When I was doing O-levels I had no way of testing the skills that the CBI tells us matter—no course work, no speaking and listening component; rather the questions often required fairly basic skills, such as summary and reading comprehension. That is one reason why I say that speaking skills should be a priority for all our state schools, as they are in so many of our primary schools. The Education Secretary observed recently that it was “morally indefensible” that some professions are dominated by pupils from private schools. I simply cannot see how bringing back CSEs will address that indefensible position. It will make it even worse.

Guy Opperman: The hon. Gentleman described how he now accepts that there was grade inflation. When did that road to Damascus discovery take place? Was it in 1997 when he was first elected, 2005, 2010 or 2012?

Stephen Twigg: Anyone listening to this debate is probably not very interested in the progress of my thinking on these matters. They are probably slightly more interested in the opportunity for Members on both sides of the House to hold the Secretary of State to account, which is the purpose of today’s debate. However, I repeat that I do acknowledge that there is an issue of grade inflation. In an interview in January 2012, the Secretary of State said:
	“It is important to recognise that it is not just grade inflation that is responsible for improvements in our schools. I do believe that our schools have got better, incrementally in some case, quickly in others, over the course of the last 15 years.”
	So in fact we can reach a consensus on this. There has been grade inflation, but there was also significant improvement in our schools during the last 15 years, for 13 of which, as I recall, the Labour party was in government.

Several hon. Members: rose —

Stephen Twigg: I will complete my speech, because a number of colleagues on both sides of the House wish to take part in the debate and I am drawing to a close.
	I worry that the Government are ignoring the central issues in the debate. The system does need reform and improvement. Labour made changes in government. For example, we made the main measure of performance at key stage 4 include English and maths, addressed social mobility from early childhood with Sure Start and free nursery places, and focused on literacy and numeracy in our primary schools. I am proud that under Labour we began to see a narrowing of the
	attainment gap between rich and poor children. That is not me saying that; it is according to analysis published by the
	Financial Times
	, conducted by Simon Burgess, professor of economics at Bristol university. He said that the Labour Government was
	“turning the tide on social mobility”.
	His analysis looked at core GCSE qualifications and the number crunchers stripped out the effects of grade inflation. The outcome was a sustained improvement in the results achieved by children from the poorest neighbourhoods. The cause of that social mobility was certainly not changes to the exam system—sometimes they are needed—rather it was investment, more and better teachers and greater freedom for schools to innovate.

Rob Wilson: rose —

Stephen Twigg: I am drawing to a close.
	This debate strikes at the heart of the approach taken by this Secretary of State, a Secretary of State who favours dogma over evidence and pet projects over changes that work for the many. These proposals will introduce a two-tier system, a massive step backwards, closing off opportunity for thousands of young people, and a cap on aspiration.
	In Saturday’s edition of The Times, the Secretary of State’s former teacher, W. G. R. Bain, wrote:
	“Although Michael Gove was once one of the brighter pupils in my form class, the top stream at selective Robert Gordon’s College, I am afraid that in the intervening years he has learnt little about hoi polloi”—
	his phrase, not mine. He concluded that
	“combative debating is his strength, not common sense”.
	Frankly, I could not have put it better myself: no common sense, instead arrogance; no interest in the evidence, instead dogma; and no interest in the many, instead naked elitism. Those of us on the Opposition Benches believe in high standards for all. We have an opportunity today to consign the idea of a two-tier system to the scrap heap.

Michael Gove: I beg to move an amendment, to leave out from “House” to the end of the Question and add:
	“notes the forthcoming consultation on the secondary school qualifications and curriculum framework; welcomes the opportunity to address the weaknesses of the system introduced by the previous Administration, which undermined confidence in standards, increased inequality and led to a reduction in the take-up of core subjects such as modern languages, history, geography and the sciences; and calls for proposals which are approved by Parliament and which are based on the principles of high standards for all, greater curriculum freedom, and a qualifications and curriculum framework which supports and stretches every child and which boosts social mobility.”
	May I first congratulate the shadow Secretary of State on his kind words about Saturday’s edition of The Times, which will be welcomed in every part of the Gove household, particularly by Mrs Gove, whose column appears on that day? I am also grateful to him for paying such close attention to the words of Bill Bain—if only I had paid closer attention to his words when at Robert Gordon’s college—and I am sure that the alumni of the school will be grateful to him for his generous words.
	We are all grateful to the hon. Gentleman for securing the debate this afternoon and congratulate him on doing so. As an experienced former Schools Minister, he brings passion and fluency to consideration of these issues. He has also brought a degree of intellectual honesty to the debate, which is welcome—I do not think that we have ever heard an acknowledgment from the Labour Front Bench that there was grade inflation under Labour. That was not the case with his immediate predecessor as shadow Secretary of State, and it was certainly not when the right hon. Member for Morley and Outwood (Ed Balls) was Secretary of State. I think that it is important that we record this moment, because it seems the first occasion when there has been a genuine acknowledgment of one of the failures of Labour’s management of our curriculum and qualifications system.
	In a moment we will discuss the future and how we might reform our examination system and our curricula, but before that I want to note how striking it was that in the hon. Gentleman’s speech, which I enjoyed and appreciated for its honesty and grace, he did not come forward with a single positive proposal for how to make our qualifications more rigorous. He acknowledged weaknesses, but at no point did he say that he would change things in any particular direction. There was no Labour policy or initiative and nothing progressive from that side of the House, merely criticism. Of course, he will have an opportunity in future debates to outline what he thinks on these questions but, at the moment, where thought and initiative should be there is still a vacuum, a hole in the air.
	Before we look to the future, let us consider the past and Labour’s record. As the shadow Secretary of State rightly said, there are aspects of Labour’s record that I acknowledge are good and wish to build on. I am looking forward to building consensus across the House on the growth of the academies programme, for example, the growth of Teach First and the importance of improving teacher training. But there are other areas where I fear that a wrong turning was taken, one of which relates to the curriculum and qualifications. In particular, as our amendment to the motion points out, we saw a flight away from the rigorous subjects that employers and universities value. Under Labour, the proportion of students taking history at GCSE dropped to just 31%, the number taking science subjects dropped by 5%, the number taking geography dropped by 15%, and the number taking foreign languages dropped by 34%. That was despite the shadow Secretary of State saying in May 2004, when he was a Minister in the Department for Education:
	“In the knowledge society of the 21st century, language competence and intercultural understanding are not optional extras, they are an essential part of being a citizen.”
	That is presumably why in September 2004 he took modern foreign languages out of the national curriculum.
	The reason why a drop and a deterioration in the numbers following those subjects matters is that they are critical to social mobility. Both parties in the coalition have made improving social mobility the long-term goal—the measure of the success—of the five years that we have in power, and we know that more students studying history, foreign languages, geography, physics, chemistry and biology means more students having a chance to do satisfying subjects at university and fulfilling jobs in the 21st century workplace.

David Lammy: Will the right hon. Gentleman give way?

Michael Gove: In a second.
	It is for that reason that we introduced the English baccalaureate measure, in the teeth of opposition from the Labour party—both sides of the coalition determined to redress that decline. What has the result been? In two years, we have already seen the numbers taking languages up by 21%; taking history at GCSE up by 26%; taking geography up by 70%; and taking physics, biology and chemistry up by more than 70%. What we have seen as a result of that determined change to the way in which we set aspiration for our young people is improved social mobility—Liberals and Conservatives working together in order to achieve it.

Gisela Stuart: I remember contributing to an Adjournment debate about the dropping of foreign languages, but how will the Secretary of State deal with a situation such as that in Birmingham, where in about half of our schools English is the second language? Will his proposals fit in with their first language and with English as their second, or will his crude measure of just any other foreign language actually not address the problem of learning the skill of a second language?

Michael Gove: I have enormous respect for the hon. Lady, who makes a very important point about Birmingham. It is the youngest city in Britain, and its multicultural traditions are part of its strength, but it is important to recognise in Birmingham that, although there are some excellent schools, such as Perry Beeches and Arthur Terry, there are some underperforming schools.
	The excellence of a school is not, however, related to the number of children who have English as an additional language; all research shows that such children are just as capable of succeeding as children from any background. What matters is the quality of the school, not the nature of the home background, and what matters for all children in the 21st century is developing the language skills that will enable them to take their place in university or in the modern workplace. That is why it was a disaster when language learning was dropped under the previous Government, and why it is so welcome that the coalition Government have seen it restored.
	Some people will ask why, if performance in those core GCSEs that matter so much declined, the headline figures for GCSE performance improved under Labour? What was going on? What was filling that gap? The truth is that we had a growth in so-called equivalent exams, which were called vocational although most employers did not rate them, and which were called equivalent to one or more GCSEs when most employers and colleges did not believe that they were. They have been eloquently criticised by the hon. Member for Stoke-on-Trent Central (Tristram Hunt), by the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and by Professor Alison Wolf in her universally praised report on vocational qualifications. There was fantastic growth in low-level qualifications under Labour, most of which, she says, had
	“little to no labour market value.”
	In 2004, students were taking just 15,000 of those qualifications, and then the Minister for Schools changed the rules. The then Minister for Schools is now the hon.
	Member for Liverpool, West Derby, and as a result of those changes a certificate in nail technology counted as two GCSEs, a diploma in horse care counted as four GCSEs and, by 2010, where previously 15,000 such qualifications had been pursued, 575,000 were being taken, crowding out real study, driving rigour to the margins and holding back social mobility.
	Incentives were created by government which, as Alison Wolf points out,
	“deliberately steered institutions and, therefore, their students away from qualifications that might stretch (and reward) young people and towards qualifications that can be passed easily.”
	She says also that, of the current cohort of children between the ages of 16 and 19,
	“at least 350,000 get little to no benefit”
	from such qualifications.

Gloria De Piero: rose —

Michael Gove: Will the hon. Lady defend that wrong turn in Labour policy?

Gloria De Piero: I asked the head teacher of a really successful academy in my constituency what he thought about the issue, and he told me:
	“We will have to limit success by choosing tiering well before students have hit their potential.”
	Does the Secretary of State believe that that fantastic head teacher, who is taking his school from strength to strength, is an enemy of reform?

Michael Gove: I absolutely do not. I am sure that that school, like many of the schools in the hon. Lady’s constituency, is doing a fantastic job, and I am grateful that she has been so enthusiastic in embracing the academies reform programme.
	As the hon. Member for Liverpool, West Derby acknowledged, the two-tier system that he talks about is not something that the coalition Government are planning to introduce, but something that the Labour Government presided over and we want to tackle. The problem is that we already have a two-tier GCSE system. As he acknowledged but then skated over, we have two types of GCSE—foundation and higher tier—in English, maths and science. We have a two-tier system of first-class and second-class qualifications. The higher tier allows anyone who takes a paper to get an A, B or C, and so on; the foundation paper is explicitly designed to limit student success. In ordinary circumstances, it is impossible for a student who enters for a foundation-tier paper to achieve a grade higher than C. It is impossible, in other words, for thousands of students to achieve the most basic grade that is respected by employers and will in many colleges allow them to progress to A-levels. The very act of entering a child for a foundation-tier paper at GCSE is a way of saying, “Don’t get above yourself—A-levels are not for you.” Even colleges that set a C grade as an entry requirement often demand a grade C from a higher-tier paper because they treat higher-tier and lower-tier GCSEs as separate qualifications.
	A cap on aspiration was Labour’s policy for the 13 years it was in power, and this coalition Government are determined to remove that cap.

David Ruffley: According to the Organisation for Economic Co-operation and Development world rankings, between 2000 and 2009 this country fell from seventh to 25th in reading and from eighth to 27th in mathematics. Without my right hon. Friend’s very welcome radicalism, we will find it increasingly difficult to compete successfully in the global economy.

Michael Gove: I am grateful to my hon. Friend, who is absolutely correct that we need to have higher aspirations for all students. That is why, in our forthcoming consultation on how we can improve GCSEs and get world-class qualifications, we will suggest that we end the tiering of papers and ensure that this barrier—this cap on aspiration—is removed. That is genuine radicalism that embodies greater aspiration for all students. After 13 years of Labour when there was a cap on aspiration, under this coalition Government social mobility is at last advanced.

Frank Field: Given that practically all the studies show that the differences between children when they are first sent to school at the age of five are not changed by schools of any nature or under any exam system, why does the Secretary of State think that the introduction of his proposed reforms will change the life chances of the poorest children?

Michael Gove: I think that their life chances can change. I usually agree with the right hon. Gentleman on almost every issue, but in this area I differ with him. I do not believe that birth or even the early years determine a child’s fate. I have seen children from very similar backgrounds, often from troubled and chaotic homes, go into primary schools and then on to secondary schools with very different qualities of teaching and, as a result, have their outcomes transformed. The right hon. Gentleman has been a fantastic advocate for the growth of the academies programme, including in his own constituency. His actions suggest to me that while he is, of course, as determined as I am to improve the early years, he recognises that we can intervene at every stage to help children and young people to succeed.

Frank Field: Of course we need to intervene at every stage as effectively as possible. While all of us, thank goodness, have seen examples of children escaping their circumstances such as those he cites, the truth is that if we look at students as classes we do not free whole groups of pupils.

Michael Gove: It is absolutely right that we make sure that we recognise that children are individuals and that teaching should, as far as possible, be personalised towards them. Children will not only have different abilities in different subjects but will mature at different stages.
	That is one of the reasons why we wanted to ensure that we developed qualifications that are not only without the tiers that set a cap on aspiration but can be taken at different points in a child’s career. At the moment, far too many children fail to secure a GCSE pass in English and maths at the age of 16 and never manage to secure a meaningful qualification in maths or English thereafter. We want to learn from Singapore, where students at the age of 16, then 17, and then 18, secure those passes.
	We must not give up on children simply because they have not reached an appropriate level at the age of 16. That is why we are reforming post-16 education and why we are placing a requirement on students who have not secured those qualifications at the age of 16 to secure them at 17 or 18. The generation that had been written off under Labour is at last, under the coalition Government, receiving support.

Stephen Twigg: The Secretary of State said that the Government will abolish tiering in GCSEs. Will he clarify whether that is because 20% to 25% of students will take not O-levels, but the new CSE?

Michael Gove: The hon. Gentleman, not for the first time, has misunderstood. We want to ensure that more and more of our children do better and better.
	There are two poles in this debate, neither of which I am happy with. One pole holds that only a minority of about 20% or 25% will ever be able to pass academic qualifications—the A stream, the elite. The other view, which was incarnated in Labour education policy in the past, is that to ensure that a majority of children pass the qualifications, we need to make them less demanding. I reject both those views. I think that more children can succeed if we make our exams more demanding, because we have a higher degree of aspiration and ambition for all our children.
	I understand why the right hon. Member for Liverpool, West Derby and other Opposition Members find it so difficult to grasp this point. Sorry, he is an hon. Gentleman—there is no cap on his aspiration or ambition. They find it difficult because the only way in which they felt that they could succeed was to lower the bar. We believe that it is by raising the bar that we can deal with this issue.

Nia Griffith: Will the right hon. Gentleman give way?

Michael Gove: No, thank you.
	We not only have a two-tier system in the split between foundation and higher tier GCSEs, over which Labour presided—

Kevin Brennan: You introduced it.

Michael Gove: Quite right. I did not come into Parliament to defend the status quo, unlike the small-c conservatives opposite. I am a radical who believes in liberating human potential. It is interesting that the hon. Member for Liverpool, West Derby and the hon. Member for Cardiff West (Kevin Brennan) are disciples of Keith Joseph. I regard myself as being in a slightly more radical, reforming, modern and liberal tradition than the late Member for Leeds North East, bless his soul.
	As a reformer, it offends me not only that is there a division incarnated in our state schools, but that independent schools are opting for the IGCSE because the GCSE is not rigorous enough and that, as a result, there is a two-tier system between state and independent schools. There is also a two-tier system between this nation and other nations because other countries have more testing examinations at the ages of 16, 17 and 18, whereas we have incarnated low aspirations in the way in which we judge our young people.

Several hon. Members: rose —

Michael Gove: Un embarras de richesses, as they say in west Derby! I give way to my hon. Friend the Member for Ealing Central and Acton (Angie Bray).

Angie Bray: As my right hon. Friend may know, Acton high school is about to open a sixth form. The most important thing for the students who study there is that we give them the best possible start as they pursue their A-levels. Does he agree that more rigorous preparation, whether through an enhanced GCSE or an O-level, would help them to get through their A-levels and go on to university?

Michael Gove: My hon. Friend makes a characteristically acute point. One problem with the current system is that GCSEs are not, in many cases, adequate preparation for A-levels, and A-levels are not adequate preparation for university, particularly when our students are compared with those from other jurisdictions. That is because, notwithstanding the incremental improvement in state education over the past 15 years, other countries have reformed their education systems faster than we have reformed ours. We have to match them and that means reform.

Graham Stuart: Will the Secretary of State give way?

Michael Gove: I am happy to give way to the Chairman of the Select Committee on Education.

Graham Stuart: The Secretary of State wants more rigorous exams that more people pass. That is an aspiration that we would all share, but it is not immediately obvious how it is to be brought about. Today, 42% of children do not get five good GCSEs including English and maths. If we make the tests more difficult, it is not immediately obvious how more people will pass them. I welcome that he is aiming higher and that we will have more rigour, but we need more detail. He is very good at explaining what is wrong with what Labour did, and I agree with every word, but he is not so good at giving us the detail of precisely what this Government plan to do.

Michael Gove: It is perfectly clear what we need to do to get more children to pass more exams: we must press ahead with the reforms that we have introduced to create more academies and free schools, to get better teachers in our schools, to have continuous professional development in which we invest in the very best people, to expand the Teach First programme, and to ensure that we have a relentless focus on raising the bar. Complacency on performance in our schools will lead us only to continue to be backmarkers. One point I would make to the Chair of the Education Committee and the House is that some schools manage to do every bit as well as schools in Singapore by getting 80% or more of their students to five good GCSEs or equivalents. We should ask ourselves why more schools are not doing as well as them. The whole point of the Government’s education reforms is to ensure that we raise standards for all.
	The Chair of the Committee asked what the Government will do to change things. We have already taken some steps. We have banned modules and resits, and introduced
	the English baccalaureate to put a stress on rigorous subjects. It is not clear whether the Opposition agree with us. We have explicitly said that we believe there is a case for one exam board per subject in English, maths and science. The Opposition inched towards agreeing with us, and I hope we can reach a consensus.
	One problem I have in attempting to tease out where the Opposition stand in order to build the consensus we all want is that whenever the Government put forward a case for reform, it is difficult to know where the hon. Member for Liverpool, West Derby stands.

Gisela Stuart: The Secretary of State mentioned Alison Wolf. He wants to be the great radical, but he must recognise that he needs to widen the skills base. He must show the House that he is attempting a dual system rather than a two-tier system if he prays in aid Alison Wolf.

Michael Gove: I would never accuse the hon. Lady of falling into the fatalist camp, but some do. The fatalist position—that we cannot improve—was touched on by my hon. Friend the Member for Beverley and Holderness (Mr Stuart), the Chair of the Education Committee, but I believe Andrew Adonis, who said: “The fatalists who say”—[ Interruption. ] As Front Benchers say, “If the cap on aspiration fits, wear it.”
	Andrew Adonis has said:
	“The fatalists who say that countries with strong academic school traditions cannot create, in a short timescale, quality vocational education institutions and pathways with real prestige should take note. It is being done abroad and must be done here.”
	It is being done here through the introduction of university technical colleges, and through the development of studio schools, which were introduced by the Government of Andrew Adonis and expanded massively by this one. It is also being done with a review of vocational qualifications, which will mean that apprenticeships are at last possessed of the rigour that all hon. Members might expect, but which did not happen under the previous Government. Thanks to the Minister for Further Education, Skills and Lifelong Learning, we have extended a requirement so that all apprenticeships will be for 12 rather than just six months. We have also extended the important work-related learning in apprenticeships. I acknowledge that there are improvements to be made, but the Holt and Richard reviews will ensure that we make them.
	If those improvements are to be enduring and if we are to succeed, if the university technical colleges and studio schools are to succeed and take root, and if the changes we are making in the academies programme are to succeed, such as the welcome addition of the Liverpool college—an independent fee-paying school—to the state sector, which was welcomed graciously by the hon. Member for Liverpool, West Derby, we need, as Andrew Adonis pointed out today, a consensus in the House.
	In calling this debate, the hon. Gentleman has asked Parliament to approve certain propositions. Let us try to approve certain propositions on where Labour stands on critical issues.

Tristram Hunt: It’s not about Labour; it’s about you.

Michael Gove: It is about the House. When the hon. Member for Liverpool, West Derby was interviewed just a couple of weeks ago, he was asked about academies. He said that one of the freedoms Labour extended to academies is freedom over the curriculum. He said we should extend that to all schools. He is therefore for the academies programme. In the same interview, however, he said: “We have now got 2,000 schools that are academies. I do not think that is desirable. I do not think that is a good system.” He was for our academies programme before he was against it.
	Andrew Adonis was quoted as saying that free schools were Labour’s invention. When the hon. Gentleman was asked about free schools, he said: “Yes, free schools are being established, some of which will be excellent.” So he was asked, “Will you create any more?”, and he replied, “That we need to look at. We need to look at that.” It was then put to him that, in fact, before looking at the policy, he had voted against it.

Stephen Twigg: May I explain?

Michael Gove: Yes, in a minute.
	The hon. Gentleman then said, “Our policy was to oppose free schools, and we voted against them.” So he was for it before he looked at it and before he was against it. Perhaps he might now illuminate the House on his position towards free schools—position 1, in favour; position 2, don’t know; or position 3, against?

Stephen Twigg: If the Secretary of State wants to ask me questions, we can always swap places. I would be happy to swap places and answer his questions, but this is a debate where he has to defend his position. Lord Adonis, whom he mentioned, has been clear in the past few days about what he thinks of the Government’s latest proposals to bring back CSEs. Will the Secretary of State rule out bringing back a new version of the CSE?

Michael Gove: I have explained exactly what we will do, which is to strengthen GCSEs and world-class qualifications. Nothing we want to do is a step backwards; everything we want to do is a step towards the high-class qualifications that other countries have. I have ruled out as clearly as I can any two-tier system. I have said that we want to move to one tier and a set of high-level qualifications. I can bring clarity to the Government’s position but not to the Opposition’s.

Stephen Twigg: rose —

Michael Gove: No, no.
	We want to know whether, as we make changes to the curriculum, the hon. Gentleman will back us on modern foreign languages, for example.

Stephen Twigg: I have done.

Michael Gove: The hon. Gentleman says yes, but his position on modern foreign languages has changed over time. As I pointed out, he said in July 2004:
	“In the knowledge society of the 21(st) century language competence”
	is “essential.” Then, in September 2004, he said, “We don’t want to go back to the old days when we tried to force feed languages to students.” Then, when he was asked in May 2011 what his real position had been on
	languages in 2004, he said: “I had mixed views.” Given this lack of consistency, can we be certain that his position now, in backing modern foreign languages, is a consistent one? And will he assent to our other proposals? Does he believe that we should get rid of modules at GCSE and end the re-sit culture? Yes or no? A simple nod will suffice.
	[Interruption.] 
	No, he is not going to get into it. No consistency! He is uncertain. Is he for it, or against it? What about the English baccalaureate? All he needs to do is nod. Will he support the English baccalaureate? We know that the hon. Member for Hackney North and Stoke Newington (Ms Abbott) and for Birmingham, Edgbaston (Ms Stuart) do.

Tristram Hunt: rose —

Michael Gove: Does the hon. Gentleman support the EBacc? Yes or no?

Tristram Hunt: I support the English baccalaureate. But my question is this: does the Secretary of State think the Daily Mail reported his intended reforms accurately and fully?

Michael Gove: I am grateful to the hon. Gentleman for supporting the English baccalaureate. The frock-coated communist has become the grey-suited radical. One of the things that matters to me is whether the hon. Member for Liverpool, West Derby supports the English baccalaureate. Yes or no? [Hon. Members: “Answer the question.”] After my appearance at Leveson, it probably ill behoves me to pass commentary on the press in this country, other than to say that I support the right of a free and rigorous press to report and comment on things with their usually pungency.
	Does the hon. Gentleman support our position on equivalents? Does he support stripping them out of the school system?

Stephen Twigg: rose —

Michael Gove: A simple yes or no will do.

Stephen Twigg: I know that the right hon. Gentleman wants everything to be black and white, but sometimes there is nuance in these debates. One of the equivalents I certainly do not support—this is the issue I tried to intervene on earlier—is changing some of the diplomas, including the engineering diploma. The excellent JCB academy, the first universal technical college, has lobbied me strongly to say that it disagrees with how the Government have downgraded the engineering diploma. There is a real risk that vocational and practical subjects will be crowded out of our schools at a time when we need more young people getting good qualifications in engineering and other areas.

Michael Gove: I am grateful to the hon. Gentleman for answering about one of the more than 1,700 vocational qualifications. So he supports the engineering diploma being an equivalent. Does he support nail technology or horse husbandry or any of the others? Again, answer comes there none.
	The hon. Gentleman says that there is nuance in his position. I say, rather than nuance, there is an absence of clarity, without which we cannot secure consensus.
	Does he believe that we should continue with foundation and higher-tier GCSEs? Yes or no? A simple nod would suffice. Again, answer comes there none, but we probably know what he thinks. When he was a Minister in the Department for Education and Skills in 2003, the “Excellence and Opportunity” White Paper said:
	“the GCSE has become a qualification at two levels: Level 2 (or grades A*–C) is viewed by the public as success, while Level 1 (or grades D–G) is seen as failure. For many young people achieving Level 1 is demotivating. Some young people prefer not to reveal that they have taken GCSEs than admit to a lower grade. This undermines motivation and discourages staying on”.
	That was the view of the hon. Gentleman and his Department in 2003, but they took no action to deal with the problem. At last, 10 years later, the coalition Government are taking action to end the problem of failure, to ensure that we no longer have an examination system that is demotivating and to end a system that discourages staying on.

Nia Griffith: Does the Secretary of State accept that with the foundation and higher-tier system there was always the opportunity for pupils to transfer, and there was always a motivation to try to drive pupils to get better than a D by getting a C? How will the new system of separating a CSE and an O-level examination allow a pupil to be pushed so that they can attain the higher level—the O-level qualification—if they have already started on a CSE syllabus, which is significantly different?

Michael Gove: I have to ask the hon. Lady where she has been for most of this debate. At no stage have we talked about separating children at the age of 14, and at no stage—

Liz Kendall: rose—

Michael Gove: I am delighted to give way to the hon. Lady.

Liz Kendall: The Secretary of State is supposed to be a man of his convictions. Parents and pupils in my constituency want to know whether the Daily Mail report was accurate—yes or no?

Michael Gove: I am grateful to the hon. Lady for asking her question. I am a man of my convictions, and my convictions are that we need to improve our GCSE system. That is why we have outlined proposals that will ensure that we change the way in which children sit qualifications at the age of 16. In place of a two-tier system, with GCSEs split between foundation and higher-tier, we will have one qualification for all students. In place of competing exam boards where there is a race to the bottom instituted under the Labour Government, we will have exam boards that will be asked to compete to go to the top, and all those exam boards will be asked to produce qualifications that are more rigorous.
	Instead of 60% of students being assumed to succeed and 40% being written off, we will set a benchmark whereby at least 80% and a rising proportion of students succeed over time. Instead of a flight away from rigorous subjects like history, geography and modern foreign languages, physics, chemistry and biology, we will ensure that those subjects are incentivised in league tables and
	accountability measures. We will ensure as a result of these changes that the drift towards mediocrity that the last Government’s qualification system incarnated is finally addressed.

Andrew Selous: I applaud the measures my right hon. Friend has taken more greatly to value spelling, punctuation and grammar. In that respect, does he share my concern about a school I came across recently whose policy was to correct no more than three spelling mistakes in any piece of work? Does he agree with me that that is a false kindness to children who might put in with a CV a covering letter with spelling mistakes, which is then put in the bin with the child’s potential being wasted?

Michael Gove: My hon. Friend is absolutely right. One change we have already made to GCSEs—again, I do not know whether or not the Opposition back it—is to reintroduce marks for spelling, punctuation and grammar so that all students know that rigour is demanded at every point.
	During the course of this debate—including the speeches from the Front Bench and subsequently—we have not heard a single constructive proposal from the Opposition on how to change exams. By contrast, the coalition Government have spelled out steps to ensure that more students take more rigorous subjects; steps to ensure that we deal with a race to the bottom and the wrong type of competition; steps to ensure that we remove a cap on aspiration; steps to ensure that we match the quality of the International GCSE and Singapore O-levels.

Several hon. Members: rose —

Michael Gove: I shall not take any more interventions at this stage.
	The reason for doing that is that we need to ensure that our curriculum and qualifications system moves on from being one that, as I mentioned earlier, has been trapped by two opposing and equally out-of-date views: either that only a minority can succeed, or that, for a majority to succeed, we have to lower the bar. I believe we can ensure that more children succeed by ensuring that the policies of the coalition Government are implemented with vigour and energy. That is why we need to press ahead with the academies programme, it is why we need to invest more in Teach First, and it is why we need the changes in education for children with special educational needs that are being introduced by the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather).
	For all those reasons, I commend the amendment to the House, and I look forward to the vote.

Several hon. Members: rose —

Dawn Primarolo: As all Members can see, many of them wish to take part in the debate. We will not be able to fit everyone in without a time limit, so all Back-Bench contributions will be limited to seven minutes. If interventions slow us down even further, it may be necessary to shorten that limit.

Pat Glass: I think that we must give the Secretary of State’s speech eight out of 10 for style, but nought out of 10 for content. It was a very good speech which, I am afraid, did not deal with the issue in hand at all. The Secretary of State was asked on numerous occasions whether the Daily Mail had reported him correctly, and he was completely evasive. He was asked again and again how the abolition of GCSEs would raise the bar, and I have to say that his responses were divisive, evasive and at times even destructive.
	What is so important about GCSEs is that they are examinations for all pupils of all abilities. They were introduced in 1988 by Margaret Thatcher and Kenneth Baker in response to huge unhappiness, largely among parents. Those of us who were in the education system at that time will remember that it was middle-class parents whose children were sent to underfunded secondary moderns and forced down the route of CSEs who brought about the abolition of CSEs and the introduction of the GCSEs that we have now, which have brought together the best of what was in the CSEs and the old O-levels.
	That approach was welcomed by the whole education community, but it seems likely that it will be abolished on the say-so of the Secretary of State, who has apparently not consulted anyone on his proposal. As far as I am aware, there has been no consultation with pupils, parents, teachers or the wider education community. The Secretary of State convened a two-year curriculum review group consisting of the great and the good to consider the issue of the curriculum, but appears subsequently to have completely ignored everything said by that group, choosing instead to develop an education policy that has no evidence base and is founded on personal prejudice.
	So what is the evidence behind the Secretary of State’s review? We have heard a lot from him about our cascading down the OECD PISA scales for English, maths and science. I am sorry, but no matter how many times he says that, it is simply not true. In the three years leading up to 2007 many more countries entered their data in the PISA tables, so the outcomes in 2007 did not measure like with like. When the Secretary of State talks of cascading down the scales, what he is really talking about are a couple of percentage points in a table that would now include many more countries than it did at the time when it was last drawn up. That is not measuring like with like. If the Secretary of State were a teacher instead of a journalist looking for the best negative headline, he would understand that.
	The Secretary of State used Singapore for his evidence base. The Education Committee visited Singapore last year just to see what was happening there. It must be said that there are many good things in the Singapore system, but what he failed to tell us was that in Singapore education is not free, and is not compulsory for children beyond the age of 11. When PISA measures the outcomes of 16-year-olds in England against those of 16-year-olds in Singapore, it is measuring the outcomes of all 16-year-olds in England against those of some 16-year-olds in Singapore. Again, like is not being measured with like.
	In Singapore the curriculum is restricted to English, maths and science, and there is no creativity whatsoever. Here we have a broad, advanced curriculum. Again, like is not being measured with like. The Secretary of State
	failed to tell us that in Singapore seven out of eight children have up to three hours of additional tuition every day paid for by the parents, over and above the tuition that is received in schools. So again, like is not being measured with like. He also failed to tell us that the Singapore system is one of the most centralist education systems in the world, where the Minister for education dictates what is taught, how it is taught and when it is taught. It goes so far that head teachers do not even apply for places in schools; they are allocated a school and they are moved on every three years—and they have no say whatever about which school they move on to.
	In using Singapore to provide evidence for his plans, the Secretary of State is comparing our state-funded, diverse, teacher-led, innovative, autonomous system with a broad and balanced curriculum that caters for all children up to the age of 16 and beyond with an almost Soviet-style centralised system where education is not free, compulsion ends at 11 years of age and there is a highly restrictive curriculum. That is not measuring like with like.
	The Secretary of State also looked for his evidence base to polls telling him that parents want to see a return to O-levels. He may well cite the recent YouGov poll that shows that 60% of those who are old enough to have sat the old O-level want to see a return to a two-tier system. However, that is what we would expect from any poll that asked questions of people over 40; they hanker back to what they know. The YouGov poll also shows, however, that 40% of those who sat O-levels do not want to see a return to a two-tier system, and that 65% of those who took GCSEs do not want to see a return to a two-tier system either.
	I accept that the system we have is not perfect, but I do not believe that the answer is to return to qualifications that were designed a lifetime ago for a world that no longer exists in which children without qualifications were able to find jobs in low-skill industries—in factories, mines, shipbuilding, steel-making and agriculture. That world no longer exists. Today’s young people need skills that were not previously taught: resilience and reasoning skills, negotiation skills, team-working, speaking skills, interpersonal skills. Those are the skills that employers are telling the Education Committee that they need. They are taught in private schools; we should be making time for them in our state schools.
	In designing our state education system, we should say, “If it’s not good enough for my child, it’s not good enough for your child.” That should be our guiding principle in designing an education system, rather than, “Outcomes for some at the expense of others.”

Graham Stuart: It is a pleasure to take part in this debate, and to rebut allegations of fatalism thrown at me by the Secretary of State. I hope I am no more of a fatalist than he is. I have observed in many of our debates that able politicians, on both sides of the House, are brilliant at describing and critiquing the inheritance from the Labour party and at painting a picture of the kind of country we would like to be, but our job in this House is to address the third aspect and examine the route map to get from position A—not very good—to position B, or nirvana
	and where we want to be. Too often in our education debates in this Chamber, we spend an awful lot of time on aspects one and two, and not a lot on the third aspect.
	Following the Secretary of State’s speech, I am a little clearer about what his plans are. I think he has said—I hope he will intervene on me if I am incorrect—that the Daily Mail was mistaken, and that there is not going to be a return to a two-tier system. He did not, for whatever reason, try to spell this out, but it sounded as if he was talking about a more rigorous GCSE. It is progress that the Labour spokesman, the hon. Member for Liverpool, West Derby (Stephen Twigg), acknowledges that there was grade inflation during his party’s time in office, and the Secretary of State makes powerful points about equivalences. The Government have certainly had my support in tackling that and in tightening up in various ways, such as by removing entirely the vocational qualifications that Alison Wolf identified as offering no real labour value to people.
	So what is the vision? If we were just talking about a more rigorous GCSE with a removal of the perverse incentives to dumb down over time—it has now been acknowledged that that was the case, even by Labour—I think there would almost be cross-House consensus. There is a recognition by Labour that it did not get everything right, even if Labour Members cannot quite bring themselves to say that yet; it is fair enough for the Secretary of State to tease the shadow Secretary of State for his failure to do so. It seems that the Labour party is beginning to recognise that a lot of the Secretary of State’s moves towards rigour have been correct. However, if we are to have a beefed-up GCSE, and if we are not moving towards a system that is more two-tier than what we have now, I would like to see more detail. I know that a consultation paper is coming, but it seems disappointing that we did not get more detail from the Secretary of State today.

Julian Lewis: rose —

Graham Stuart: I give way to my hon. Friend.

Julian Lewis: I am very grateful to the Chairman of the Education Committee for giving me the opportunity to ask the question that I was hoping to ask of the Secretary of State. Given that both sides now seem to accept that there has been a problem of grade inflation, could we pay a little bit of attention to the marks that underlie the grades? One of the problems that I felt many years ago with the introduction of grades for O-levels, rather than marks, was that it did not matter if somebody got 70%, 80% or 90%: anybody who reached a certain level—70%, I think—still got the same top grade. This was the beginning of an inflationary process. Would not the stating of actual marks—

Dawn Primarolo: Thank you. That is quite enough. That is a very long intervention in a very short debate.

Graham Stuart: Fortunately, my hon. Friend takes me to the issue I wanted to address next, which is the administration of examinations. Unfortunately, however, I am unable to comment on that now. The Education Committee has conducted a long inquiry into precisely that issue, looking at the trade-offs between a single board, competition between boards, franchising by subject
	and various other ways of cutting it. We have concluded our report, but because of the examination season—whoever leaked this story to the press last week was obviously less sensitive than us to the fact that children were taking exams—we decided to delay the publication of our report until 3 July. So, I am afraid that, until then, I cannot engage in that issue. However, we have looked at it in depth, and I hope I am not in contempt of Parliament if I say that the Committee came up with a unanimous recommendation and report. I hope that those on both sides of the House will wait until at least 3 July before allowing any of their opinions to solidify further.
	If the Secretary of State is talking about a more rigorous GCSE system—whether it is given a new name or not—which is effectively a single examination system, as we have now, that would rather destroy the entire premise of my speech, leaving me short for words.

Damian Hinds: Time for a coffee.

Graham Stuart: Time for a coffee and to let others speak.
	However, over the last two years the Government have made a series of announcements looking to put greater rigour into the system. They announced the ending of modularisation of GCSEs, tackling the culture of re-sits, ending equivalences and promoting the English baccalaureate, which, of course, rewards those students who achieve good GCSEs in English, maths, two sciences, a language and either history or geography. However, at the end of that process, if the leak is to be believed—I am in a state of confusion now—they suddenly announced the scrapping of GCSEs altogether. That does not seem terribly coherent.
	Just last June the Secretary of State said the following about GCSEs:
	“So next year the floor will rise to 40 per cent and my aspiration is that by 2015 we will be able to raise it to 50 per cent. There is no reason—if we work together—that by the end of this parliament every young person in the country can’t be educated in a school where at least half of students reach this basic academic standard.”
	He went on to say:
	“A GCSE floor standard is about providing a basic minimum expectation to young people that their school will equip them for further education and employment.”
	That was the direction of travel then; suddenly, a year later—if we are to believe the Daily Mail—that has been scrapped. On the other hand, if I understood correctly what the Secretary of State said today, that was an entirely false idea and there is no plan to do such a thing at all.

Kevin Brennan: I think we are all trying to decipher what the Secretary of State said. Is it the hon. Gentleman’s understanding that the Secretary of State said that he would expect 80% of pupils to sit this new single-paper GCSE, and if so, what does he think ought to happen to the other 20%?

Graham Stuart: As I have said, I think that increased rigour throughout the system is necessary and important. I think that the accountability system for schools needs to be changed so that it does not have perverse outcomes, such as putting people on courses that lead nowhere but
	allow the institution to meet its benchmark—we on the Committee have been critics of that for some time. Perhaps the announcement, or the leak, suggests a change in view by the Secretary of State on that front.
	If we look across the system, where we need more rigour and we need to ensure that we end the perverse incentives, we find that the biggest problem we face in a global knowledge economy, where the first rung of the ladder keeps rising up, is what we do about people who are not getting those basic skills and that basic education. The Government have two priorities for education: raising standards for all; and closing the gap. Those are right, but when setting priorities it is terribly important to show what the top priority is. I am yet to understand how the changes specifically will help the least able, but then again I am unclear as to what exactly the proposal is—even if I have not quite fallen to the level of the hon. Member for Cardiff West (Kevin Brennan), who of course got so confused about percentages last week.

Kevin Brennan: I did get a grade A O-level—

Graham Stuart: That is a lot better than I did, so I will leave it there.
	Ofqual now has a statutory duty to ensure two things, one of which is that we maintain standards over time. We shall see whether it does its job right; it is relatively newly empowered and we need to give it the chance to see whether it can reverse this grade inflation and keep us up there with our international competition. Has it said that there needs to be a restructuring of the examination system, not necessarily the administration of it, but the whole quality of it and the possible tiering of it? I would like to hear from the Secretary of State about that.
	I have only a minute left, so I shall finish by repeating that the central problem is what we do about the young people, all too many of whom are now not in education, employment or training—NEET—and are being left behind. A more rigorous system is great, but the only way to raise standards ultimately—this is the only thing that matters in education—is through quality of teaching. We need to ensure consistent, high-quality teaching and an excellent institution for everyone, everywhere. At the moment, there are all sorts of incentives in the accountability system to focus on borderline pupils at the expense of those at the bottom, and within the system for people to move from a school that is very challenging to one in the leafier suburbs—a much more congenial place for many people to teach in. We need to look at re-gearing our whole system in a way that the Labour Government failed to do, despite efforts in that direction, to ensure that we provide opportunity for all, because both socially and economically we cannot afford to have so many children left behind, unable to get on the first rung of the economic ladder and thus be full members of our society. If any proposals from the Secretary of State are driven by that central insight, he can certainly look forward to my support.

Liz Kendall: In 2006, New College school in my constituency was the worst secondary school in England for truancy, the worst in the value-added league tables, and fifth from bottom overall for GCSE
	results. Just one in 10 pupils taking GCSEs at the school scored five grade Cs or better, while the truancy rate was running at more than 10 times the national average. I was therefore very proud when last Friday New College was named by the Specialist Schools and Academies Trust as being in the top 10% of improving schools in the country. The number of children getting five A to C grades at GCSE including in English and Maths has gone up by 450%, and the number getting five A to C grades overall has gone up by a staggering 700%.
	Jane Brown, the head teacher at New College, says that three key things have helped it to achieve those phenomenal results, and that the first and foremost is having the right teachers—moving on those who were not up to scratch and replacing them with the very best. The second thing is the focus and financial support from the national challenge programme, which has enabled New College to get external support, including from the ex-head of education at Nottingham, and pay for additional resources, such as tutors to give intense one-on-one support in English and Maths. The third thing is not allowing the school to get blown off track by different Government initiatives, and instead focusing consistently and relentlessly on what really matters to help children learn, aspire and achieve. The teachers, support staff, volunteers and students at New College deserve huge congratulations on their hard work, commitment and success. Although they are rightly proud of their achievements, they are not complacent, and they are determined to make even greater improvements in the future.
	I have spoken to Jane and to some of the other heads at secondary schools in Leicester West about the Secretary of State’s plans—or, at least, reported plans—to change GCSEs. They think—and I agree—that a single exam board could be a positive step to help tackle unhelpful competition between exam boards and stop some heads thinking, “Which exam will get the best results for my school?” rather than, “How can we give our students the best education for life?” Achieving A grades in GCSEs should be really demanding, and with a single syllabus there is no reason that cannot be achieved. That is something we should be considering.
	Jane and the other heads do not support a return to a two-tier system where children are told at age 14 what they can and cannot achieve. Telling some children before they have had a chance fully to develop that they are not good enough to do O-levels will not boost their self-esteem, but crush it. Telling them they can manage only CSEs, which will inevitably be a less valued qualification, will not raise their achievement, but cap it. We should not be putting a ceiling on children’s aspirations; we should be blasting those ceilings away.
	This proposal is a terribly backwards step from a Secretary of State who does not seem to understand what it takes to help children from chronically deprived backgrounds to aspire and achieve. Jane Brown, who has proved through her hard work and effort what can and must be done to turn schools around, says labelling children as failures so early would be disastrous. Instead of helping schools such as New College, which have created a “yes you can, yes you will” culture for all the students all the way through to the end of year 11, the Government’s proposals will return us to the days when some children ended up believing that they could not and that they were failures, particularly if they came from very
	disadvantaged backgrounds. That is why I urge the Government, in the strongest possible terms, to rethink their plans. If the Secretary of State would like to visit New College and see what it really takes to turn around a school that was in a terrible state some years ago, so that it is now doing really well for the people I was elected to represent, I am sure that he would be welcomed.

Damian Hinds: Young people are working harder in our schools than ever before, guided by probably the best ever generation of teachers. Certainly, lessons are planned and progress tracked in a way that it never was when most of us were at school. Young people are also examined more, at considerable cost to our schools—the average cost of exams to maintained secondary schools was £44,000 in 2003 and £96,000 by 2010. Those pupils and teachers are being let down by a system that has allowed the erosion of confidence in their qualifications.
	There is massive pressure on schools, as we all know, from the five-plus C-plus measurement in league tables. Although it is true, as many right hon. and hon. Members have said, that there have been real improvements in educational attainment, it is also true that ever since those league table ladders were created, ingenious schools have found ever more ingenious ways of getting up them, aided and abetted by public policy and the exams industry, with things such as double awards, short courses, half GCSEs, new subjects and, of course, the granddaddy of them all, equivalents, which make a 19 percentage point difference in the league tables. If equivalents are included, 75% of children get five or more GCSEs at grade C or above, but that goes down to 56% if those equivalents are taken out.
	Like economic growth, improvements in grade have both a real part and an inflationary part. The real growth comes from better teaching, better teachers and more engaged parents, and I think we have see ample evidence of those things.

Gloria De Piero: In that case, would the hon. Gentleman listen to a maths teacher from my constituency and the 11th most improved school in the country from 2012, who says:
	“The current GCSE system allows every pupil to achieve beyond their potential and is fully recognised by employers regardless of tier”?

Damian Hinds: I am always happy to hear from distinguished maths teachers, but I am not quite sure how the hon. Lady’s intervention relates to or contradicts what I just said. I was saying that there have clearly been real improvements, but I do not think there is anyone left, including that distinguished maths teacher, who doubts that on top of those real improvements there has been significant grade inflation, as acknowledged by the shadow Secretary of State.
	There are four key elements to the grade inflation. First, there has been the gradual easing of what we used to call the syllabus—now called the specification—on the part of the exam board. Secondly, at the school end, there has been teaching to the test. Thirdly, there have been all sorts of elements in the design of examinations, including modularity or what is now called unitising, early takes, re-sits, the use of calculators and so on.
	Fourthly—this sounds a bit dull and technical but it is very important—there is the statistical tolerance in the results. Every year, there is rightly a normalisation to say what results, for example, a key stage 4 cohort should get relative to what they achieved at key stage 2, with perhaps a 1% tolerance either way on a finding—but of course the tolerance only ever goes up. That is the most pure form of grade inflation.

Mark Tami: The hon. Gentleman is making these points about how people work within the rules to maximise the effect, but even when I was at school there were children who were thought to be marginal when it came to getting an O-level and were dissuaded because it was thought that they would skew the results and do the school down. Let us not pretend that this is something new.

Damian Hinds: The hon. Gentleman is very youthful looking but I am not sure the league tables were in place when he was at school, so I find that point slightly confusing.
	Does it matter that there has been grade inflation? I think we have all heard from higher education institutions, employers in our constituencies and members of the public that it does matter. One witness who gave evidence to the Education Committee’s exams inquiry said they did not believe that employers expect to be able to compare exam results over time, but I have news for him: that is exactly what employers, higher education institutions and parents expect to be able to do, and quite justifiably so. However, the system does not support them in doing that. Although there have been many factors at play with grade inflation, there are three root causes among which there is interplay: the pressure on schools to deliver the results; the competitive land grab for volume market share on behalf of the competing exam boards; and a too malleable system that attempts to put everything on a single scale when everything does not necessarily fit together.
	I think we have moved on a good way in this debate. Over the past few days, the phrase we have heard most often on this subject has been about not wanting to return to a two-tier system, but increasingly there is a recognition that there are two tiers now, with 40% of youngsters being left behind. One could even argue that there is a third tier, with the young people who are put on to other qualifications that are of so little value to them in later life. Even in the purer sense, within a single-subject GCSE there are the two tiers of the foundation level and the higher level. Although this has been talked about much today, it is in many ways the best kept secret in education. I keep finding, when I talk to the parents of 14 and 15-year-old pupils, that they are not aware of that distinction. In many ways O-levels and CSEs never went away—they were just rebranded, but into one thing.
	Let us take the example of GCSE maths. If someone is entered for GCSE maths at foundation level, that decision will be taken when they are in year 10 and the highest grade they can then achieve is a grade C. That sounds very much like getting a CSE grade 1 in the 1980s. And it is not just maths. Other subjects that are tiered include biology, physics, chemistry, general science, classical civilisation, Latin, English literature, English language, geography and modern foreign languages—
	almost every one of the core academic subjects that most of us did at school, with the single exception of history.

Liz Kendall: Will the hon. Gentleman explain how having O-levels and CSEs would make that two-tier system better?

Damian Hinds: I have a great deal of respect for the hon. Lady, who is an erstwhile colleague of ours on the Select Committee, but I am not proposing a return to anything from the past. What we must do is build an exam and qualification system that is fit for the future and reflects the new reality in which the participation age is 18, not 16. We must make sure that all young people can reach their potential at 15 to 16 and that if they have not done so by that point, particularly in key subjects such as English and Maths, they go on to do so at 16 to 18 and beyond.

Nia Griffith: Will the hon. Gentleman give way?

Damian Hinds: I am sorry, but I am running very short of time.
	There is a bunch of complications in this two-tier system—for example, it applies to some subjects but not others, and there are even subjects for which students can enter one paper at foundation level and still score a grade B or A. There might be good reasons for all that, but one thing this system is not is clear. I understand the argument that all must have prizes, and in some ways that seems like a good thing, but it does young people no favours to kid them that the worth of the qualifications they are taking is greater than it really is. Instead, we must strive so that all merit prizes. We should aspire to the vast majority of children getting those key subjects aged 15 and 16, but as I said in reply to the hon. Member for Leicester West (Liz Kendall), there must be the facility to return to them at age 16 to 18. One of the key points in the Wolf report was the lack of post-16 focus in our country compared with others on English and maths in particular—subjects that command a huge premium in the workplace.

Graham Stuart: Will my hon. Friend give way?

Damian Hinds: I am sorry, but I cannot.
	For our country, we need world-class exams to win in the fiercely competitive new global economy. For our young people, we need worthwhile qualifications with the right breadth, depth and usefulness that will serve them well in their work and in their life.

Gordon Marsden: The Secretary of State ducked and dived round the Daily Mail’s ring like a bantamweight, but that did not disguise the fact that he has still not this afternoon come out and denied the newspaper’s central thesis of a return to CSEs. The reality of a return to a form of CSEs and a form of selection is a return to educational apartheid. The Secretary of State, like many others, including me, went through a selective system and did well out of it; we went there and got the T-shirt, but I will never forget
	the shiver that went down my spine as I did my 11-plus and nor will many others. The truth is that that system failed too many of our young people, and 20 years as an Open university tutor taught me that the backs of many of the people who came to a second chance with the Open university were scarred by that experience.
	When the shadow Secretary of State, my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), talks about a cap on aspiration, he is absolutely right. In 2010, the Secretary of State said that Dickens and other authors should be studied in English lessons to improve young people’s grasp of the English language. As this is the year of Dickens, perhaps the right hon. Gentleman will reflect on the words of the Ghost of Christmas Present to Scrooge in “A Christmas Carol”:
	“Oh God. to hear the Insect on the leaf pronouncing on the too much life among his hungry brothers in the dust.”
	It is the hungry brothers and hungry sisters in the dust we need to be concerned with.
	The Secretary of State ducked elegantly around the subject, but I know how important GCSEs have been in my Blackpool constituency—an area with low skills and historically modest academic achievements. They give students the ability to bridge the academic and vocational divide and to develop skills in creative, leisure and tourism activities that are vital to keep people in the local economy, and the flexibility of mind that comes from coursework as well as exams. What use to them would CSEs be? What use, for example, would CSEs be in special schools? That is another aspect the Secretary of State should take into account.
	My hon. Friend the shadow Secretary of State rightly referred to the comments by Chris Cook in the Financial Times and I shall not expand on them, except to say that Mr Cook made the important point:
	“Take a look at the belt from Liverpool to Hull—the CSE towns of tomorrow.”
	Blackpool will be one of those towns and I have no wish to see it go into the Secretary of State’s pot.
	The Secretary of State says he is a man of convictions, and I agree. He is guilty as charged, and the charges should include the following: scrapping vocational diplomas in the system regardless of the lack of concrete plans to involve business in the curriculum; introducing an English baccalaureate that gave no space to vocational education; creating havoc in the careers system by taking £200 million out of face-to-face communication; failing to have any policies on the sort of life skills and communication skills that were discussed earlier; and not listening to his colleagues in other Departments, not least the Minister for Further Education, Skills and Lifelong Learning, on vocational issues. The Secretary of State spoke about world skills. Would the WorldSkills people who won gold medals for Britain last October benefit under his two-tier system? Absolutely not.
	Like Robert Louis Stevenson, the Secretary of State was born in Edinburgh. Perhaps that explains why, from time to time, he appears to resemble one of Robert Louis Stevenson’s famous characters, Jekyll and Hyde. One day he can craft an eloquent paean to vocational aspiration, but the next day he talks about micro-management, which is not what we want to hear. Young people and schools are not train sets to be broken up every few years and re-arranged in a different pattern.
	Both the Secretary of State and his Minister of State, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) sit on the Front Bench like relics from the past. As Talleyrand said of the Bourbons, they have forgotten nothing and they have learned nothing. They have forgotten nothing about the failures of the past, but they have learned nothing, as is clear from the way they wish to turn back the clock.
	The Secretary of State spoke of being a radical and spoke in the tone of a mad Maoist. I do not know if it is possible to be a mad Maoist Bourbon, but he is making a passable attempt at it. I do not know whether it is a leadership manoeuvre or the latest quaffing of the potion from R L Stevenson that turns him periodically into Mr Hyde. I do not know and, frankly, I do not care. What I care about passionately, as all Members of the House should, is that the life chances of hundreds of thousands of our young people should not be jeopardised by his “Mad Monk” half-hours.
	If the Secretary of State wants to look at reforming GCSEs, at the balance between coursework and examinations, and how we make GCSEs work properly, we can help him with that. He could do worse than turn, for example, to my hon. Friend the Member for Huddersfield (Mr Sheerman), who has done a great deal of work in this area.
	We should be building bridges in education, not burning them. We should be offering young people, as we offer others, every opportunity to show that they can deploy a variety of skills, not putting them into blocks on the line or forcing them into second-class status. I yield to no one in pursuing academic excellence, seeing the strengths of traditional education, stretching young people and not soft-landing them, but we want an education system that combines the best of traditional strengths with an understanding of how we need to relate to a modern world of green skills and a low carbon economy.
	We should be raising young people up, not putting them down. If we do not do so, not only will they and their families be harmed, but our economy and our ability to compete will be maimed and morphed into a grotesque Hogwart’s parody of education, for which this Secretary of State would bear a solemn responsibility.

Dan Rogerson: We seem to be having a remarkable outbreak of consensus in the Chamber—

Stephen Pound: Yes. Put a stop to that.

Dan Rogerson: The hon. Gentleman is welcome to the Chamber. We look forward to interjections from him.
	What was presumably billed, as Opposition day debates are, as a good knockabout seems to have collapsed into consensus. I am left feeling that I agree with much of what has been said from both sides of the House about the way forward in terms of rigour and a genuine consultation and re-examination of the examination system. I am left disagreeing only with the Daily  Mail, a situation in which I often find myself, so it is reassuring territory for me.
	If we are to consider the key points of the debate, we should look at what was floated in that esteemed publication as a bid to end the GCSE and restore the O-level and a qualification equivalent to the CSE. It is a little like those debates about selection, in which one hears a lot about grammar schools but not so much about secondary moderns. That is not to say that there are not excellent schools out there which are now no doubt called comprehensives or academies, but which once upon a time were known as secondary moderns. They are doing good work in areas where selection still exists, but that it not a position that my party would seek to push forward.
	I was delighted to hear the Secretary of State at the Dispatch Box talking about a thorough examination of the GCSE, what it is, what it offers, how testing it is of young people, and its ability to stretch young people at all levels of ability, so that we celebrate the fact that not everyone will get an A*, and for those who were at one time predicted to get an F in some subject but who manage to get a D, that is a real success for them.

Graham Stuart: We are raising the participation age by looking to use the extra years up to 17 and 18 to deliver a basic and rigorous standard. The most successful state school in the country, which I think is Lawrence Sheriff school in Rugby, uses a three-year course for its GCSEs and gets a tremendously high level of success. Perhaps it would be helpful to find out more about how education can be structured so that children can keep on learning until they get to that very high standard.

Dan Rogerson: The Chairman of the Select Committee said that he had to rewrite his speech. He has clearly been doing that and has made an additional contribution to the debate. I welcome his intervention.
	The debate is about how we can ensure that all young people are stretched by the system—that they are driven forward, that they are inspired and that they can aspire to reach the very best. That is what teachers, head teachers and their parents want for them. It is clear that there has been grade inflation, a topic that has been covered by several right hon. and hon. Members. People are perhaps being given the impression that there is an endless arc upon which we will see results improve. We had a brief discussion about the Deputy Prime Minister’s progress at the Rio summit and the issues there of exponential growth without due consideration being given to sustainability. Perhaps what we are talking about in this debate is sustainability in the examination system.
	When the Secretary of State came to the Dispatch Box last week to respond to an urgent question from the hon. Member for Cardiff West (Kevin Brennan), we had a slightly more Daily Mail-influenced discussion across the House, as the news was hot off the press. The Secretary of State at that point was clearly responding to the leak, from wherever it came, and was not able to present a more thorough position, as he has done today. He ruled out the idea of returning to the 1950s with the O-level and the CSE, and instead proposed re-examining the GCSE and moving forward. I welcome that.
	The proposal relating to examination boards seems to be moving forward to consultation. I can see the strengths of a system in which a board concentrates on a particular subject area. There are those of us who might be surprised not to see the Secretary of State
	looking at a more market-based solution. The proposal could be said to be a little centrally directed, but as my hon. Friend the Member for Wells (Tessa Munt) pointed out, young people are increasingly moving with their families to other parts of the country. If they join a school or college part-way through a course where the syllabus is different from their previous course, that presents problems. There have been one or two examples where the head teacher of an academy, who is responsible for admissions, has said that they are not able to take a young person on a course offered at their institution because the syllabus is different. Perhaps progress could be made in that respect.
	These issues would need close examination to ensure that a range of courses was available so that all young people are inspired by what is on offer. There must be no sad homogenisation, and teachers must have the scope to ensure that they cover a broad curriculum.
	We have an opportunity to look closely at the issue of rigour. I am delighted that we are not moving towards a wholesale change of the system, which could prove to be a distraction. As a Government the coalition has rightly moved to lift burdens on teachers and to remove unnecessary bureaucracy. Teachers want from us the support to use the skills that they have acquired. The Secretary of State was absolutely right to point out that we have a fantastic generation of teachers out there inspiring and working with young people. They do not want another upheaval and change; they want the confidence to know that the examinations to which they are submitting their students will be correct, robust and a fair assessment of those young people’s attainment, and, in some senses, of the attainment of the school or college in supporting those young people to the best of their potential.
	I am delighted to say that the motion hangs on the words of the Deputy Prime Minister, unlike the shadow Minister, who sadly is not hanging on the words that I am offering to the Chamber. He clearly was hanging on the words of the Deputy Prime Minister last week, and it is good to see that the Opposition take such close account of what he has to say, as they did earlier this afternoon. The motion talks about a Government proposal to do certain things, which, as has become clear, the Government are not proposing to do. Therefore, it would be entirely the wrong thing to support a motion based on such a false premise. On the other hand, we have an amendment, around which I hope the House can coalesce, which talks about rigour and the need to ensure that there is a broad-based curriculum focused on the key areas of study and encouraging all young people to aspire to the best of their potential, and tackling social mobility, as the coalition agreement and the Government have set out to do, to ensure that all young people, no matter where they start out, are given every opportunity to achieve the very best for them and for their communities.

Tristram Hunt: In contrast to the Chair of the Select Committee, because I have a more cynical frame of mind, I will work on the assumption that the Daily Mail report of 21 June was correct and that the briefing came from someone close
	to the Secretary of State’s office, from a special adviser or perhaps the hon. Member for Grantham and Stamford (Nick Boles) at last earning his crust. I will also work on the assumption that today’s debate is part of testing the response to that. If at any point the Secretary of State wishes to stand up and say to the House, “No, Mr. Tim Shipman of the
	Daily Mail 
	as ever got it totally wrong and we have no plans in this direction,” I will happily yield the floor. But I also warn the Secretary of State that he is going down a dangerous road, because if, as we have heard this afternoon, he has no plans in this direction, there is little more dangerous than the
	Daily Mail
	spurned. But for the moment I will work on the assumption that it is correct.

Kevin Brennan: If my hon. Friend is incorrect and the Secretary of State has performed some kind of humiliating climbdown today, does he think that the Secretary of State will have to apologise to all those who came on the media to back him, including Toby Young and all his other friends in the right-wing press?

Tristram Hunt: It was amazing how they were all ready, almost whipped in, but perhaps the Secretary of State will have another visit to the High Court and his friend Judge Leveson to explain all this.
	The Secretary of State will know that I have no problem with some of his policies. I am happy to support the English baccalaureate, much greater rigour in standards, and the ending of endless repeat examinations and an end to semi-vocational, grade-inflating GCSE-equivalent exams. However, I share with my hon. Friend the shadow Secretary of State serious reservations about the downgrading of the engineering diploma, at a time when we are interested in rebalancing the British economy. I am in favour of schools being allowed to conduct internal streaming, of academy schools in the right circumstances, of apprenticeships when done properly. As an historian, I am also in favour of pupils learning dates and poems, because that provides the structure and the architecture that allows for greater learning and understanding. I am in favour of the Wolf report and what it means for skills training.
	A large part of the agenda I can concur with, but this bizarre decision to think about abolishing GCSEs and reintroduce O-levels and CSEs strikes me as deeply misguided. How would this help children in my constituency of Stoke-on-Trent? I want students in my city to take GCSEs in relevant subjects, to be taught well and to aspire. I do not think that at the age of 14 they should be hived off into CSEs; for their aspirations to be put into a straitjacket. As the Chair of the Select Committee said, we know the problems about standards, but no Government Member has been able to stand up and say, “Yes, the solution to this problem is, as reported in the Daily Mail, the O-level/CSE divide.” Until we hear that, this is, as the Chair also said, a slightly bizarre debate. But I will continue working on the dangerous assumption of Daily Mail correctitude.
	Looking at the Financial Times research, 25% of children in my constituency would be put into the straitjacket of CSEs. That is not the soft bigotry of low expectations, but the hard bigotry of low expectations in action. It demonstrates a total poverty of ambition.

Graham Stuart: An interesting outcome of this debate was texting my office to ask how many people—I realise that as Chair of the Select Committee I should know this—take these foundation GCSEs. The answer I got back is that that information is not collected by the Department for Education or by the exam boards. Go figure.

Tristram Hunt: I thank the hon. Gentleman for that intervention. That is why I found the discussion about employers knowing the difference between a C at GCSE at different levels attained wholly fallacious. If the big problem of educational attainment is the long tail of under-achievement, the measures to combat that need to be there for all. There is no evidence to suggest that dividing at 14 will help that. We had an interesting contribution today on some of the neurological evidence of the potential for growth from 14 to 16. What we do have evidence for is how overwhelming it will be for the poor and those from socio-economically challenged backgrounds who will be condemned to the new CSEs. That is why the 1980s Conservative Government abandoned this policy. In 1985, Sir Keith Joseph, who became Lord Joseph, unveiled evidence that there is
	“strong association between low achievement and the poverty-related factors of poor housing, single-parent families and a low proportion of children in higher socio-economic groups”.
	This policy of division was too divisive even for Sir Keith.
	We also hear that with the new O-levels there will be no national curriculum—although a back-door one because of a single qualification authority. This strikes me as a rather strange route to developing the kind of curriculum we want, drawing on a wide knowledge base. It also flies in the face of the Secretary of State’s ambitions to create a national narrative of British history, to teach in all our schools a single notion of British history that imbues notions of citizenship which develops a—rather Whiggish in my view—conception of the British past that all will share. They will not all share that if there is no national curriculum. The greater the division between schools, the greater the division in the teaching of history. Any ambition to teach a cohesive notion of citizenship through the teaching of history is totally undone by the elimination of a cohesive national curriculum.
	Internal reforms of the GCSE would be welcome. Clampdown on grade inflation and the proposals vis-à-vis the examinations board are to be welcomed. An end to generalised humanities GCSEs—the merging of history and geography—are to be welcomed. We can learn from the international GCSE, the I-bac. But all that can be achieved within the current system. That is the tragedy of what the Secretary of State is up to.

Andrew Turner: The hon. Gentleman mentions the baccalaureate and international GCSEs. If those are acceptable, and it seems that they are, and they are the examinations for able pupils, which they are, what would happen to the other GCSEs that would be occupied by the less able?

Tristram Hunt: The point about the GCSE is that it is a general certificate of secondary education. The point about the CSE is that it had stigma attached to it. At GCSE one can have an A and an A*. There is still the GCSE and a structure. The briefing to the Daily Mail is
	that there is an ambition to return to a more divisive system. The tragedy is that there is so much work to be done: the quality of teacher training; ending the scandal of an ever-expanding key stage 4, which means pupils are finishing history or geography in year 8; ending the relentless examination culture that sees AS exams in the January of the lower sixth—we need to get rid of that; embedding a new strategy for the teaching of foreign languages; driving up numeracy and literacy. These are the real challenges confronting schooling. In the face of these challenges, this political strategy seems a massive misallocation of the Secretary of State’s time and resources and those of civil servants in his Department. The Government are already reviewing the primary and secondary school curricula, so why also begin this tub-thumping policy that is not based on empirical evidence?
	This is no way to make policy: revealing these kinds of ideas in the Daily Mail, a newspaper usually opposed to deep thinking, learning and cohesive policy development, and at a time when young people are taking their exams. All we can hope is that it is a rather cack-handed example of kite-flying by a Secretary of State who is slightly puffed up at the moment and that the kite will soon be shot down and normal service resumed.

Guy Opperman: This has been a confectionary debate featuring a number of individual sweets, not least the polo mint that constitutes the motion. I have studied it in great detail and found nothing that takes forward this country’s education debate. In the words of one coalition colleague, it is an “opportunistic wheeze.” Having studied the motion and found nothing of substance, we should then go back to the words of the hon. Member for Cardiff West (Kevin Brennan), who so enlightened the House when he outlined the Opposition’s education policy last Thursday:
	“We on the Opposition side of the House believe in a modern education system that promotes high standards, rigorous exams”.—[Official Report, 21 June 2012; Vol. 546, c. 1026.]
	He had earlier sought an apology, but of course thus far we have had no apology for his claim that three in 10 pupils equalled 60% of them. When one studies the specific proposals he put forward last Thursday, one has to ask oneself, “Is this not lighter than air?” It is the Aero policy we are now studying—

Kevin Brennan: This is the humbug speech.

Guy Opperman: No. I can assure hon. Members that it is the hon. Gentleman’s proposals that are lighter than air; I have studied them and found that there is not much in them.
	We then move on to the Celebrations moment. While I was in hospital last year, when something took place that was of good order I would be provided with a large box of Celebrations. There was such a time earlier today: the shadow Secretary of State, like St Paul on the road to Damascus, stood forth and admitted for the first time that there had been grade inflation under Labour. However, despite repeated questioning by me and others, he refused to state when he first discovered this grade inflation. Was it 1997, 2005, 2010, 2012, or was it yesterday? He failed to divulge when that magical
	event took place. That is a crucial point, because the discovery of grade inflation is utterly important to an assessment of how this policy is going forward.
	Despite throwing money at the problem, the previous Government did not see the results. As other Members have outlined, maths, literacy and science all declined, whatever type of test was taken. Academies do work, and I applaud the expansion of that programme. Let us take as an exemplar the words of Andrew Adonis, the former Schools Minister, who said there should be “strong independent governance” that was “free of local authority red tape”, with exemplary leadership and “brilliant teachers” who were specially chosen. That is the way forward.
	In Northumberland, part of which I represent, schools saw little of the financial benefit that the previous Government bestowed on individual local authorities. The situation has changed, I am pleased to say, with the rebuild announcement for Prudhoe community high school, and I look forward to welcoming the Secretary of State when he visits Northumberland shortly. I will also be showing him the amazing Queen Elizabeth high school in Hexham, another school that was denied any sort of funding or rebuild under the previous Government.
	However, I have two reservations that I want to raise with the Minister. First, we should be wary of change for change’s sake. Every teacher in Northumberland I spoke with before the last election explained with growing depression how every year there was a different syllabus, a different amendment or a different set of textbooks, all costing huge amounts of money, in circumstances in which some consistency was clearly needed so that they could get on with what they wanted to do, which was to teach.
	Secondly, I wish to echo some of the comments that have been made on vocational education. I am not a fan of nail technology being a GCSE. However, I represent a constituency in rural Northumberland where we value vocational education very highly. I suggest that the lesson the Minister should take forward is not to throw the baby out with the bathwater. It is absolutely vital that we hang on to the engineering and alternative qualifications. I totally understand and applaud the desire to reduce the number of vocational qualifications, but there is a danger of being excessive in that policy, and in rural areas in particular that will affect the quality of education provided.
	Given the time limit and the number of Members who wish to speak, I will bring my remarks to a close. I suggest that in these circumstances there is a great deal of scope. I support what the Government are doing and think that the motion has absolutely no merit whatsoever.

Several hon. Members: rose —

Nigel Evans: Order. I am grateful to the hon. Gentleman for the self-restraint he has shown. I am now reducing the time limit to five minutes.

Alex Cunningham: Young people are our future, yet the value some people place on them and their achievements is extremely low. I feel
	that many members of the current Government must be trying to secure some kind of medal, in this Olympic year, for driving the value of our young people and their achievements to a record low. Time and again they send young people negative messages, undervalue their hard work in sitting their examinations and then, when they do well, put the boot in again by suggesting that their certificates are hardly worth the paper they are printed on.
	The Secretary of State wants to drive up standards—we all do—but the actions he now proposes will effectively write off a large number of young people who need the greatest support and lower their expectations for a happy and productive life. Does he really believe that that is the way forward, or are his latest pronouncements about something else? Is he using our children and their education to create a debate in the Tory section of the Government, where attitudes are very different from those of their coalition partners? Is he just playing controversial games with our children’s future, as the newspapers suggest, as he aims to take over from a weak Prime Minister who is struggling to harness his partners and achieve the right-wing agenda he thought he would be pursuing after the general election?
	The former Prime Minister, Margaret Thatcher, axed the two-tier O-level/CSE system. She, like the president of the Liberal Democrats, recognised that it was divisive and dumped millions of young people into a second division from which they could not escape. I never thought that I could agree with such people on anything, but on this I cannot help agreeing with them both. I never thought that a son of Thatcher—perhaps a grandson—could be the one to turn against her in such a way.
	The Secretary of State has said:
	“The coalition Government’s education reforms are designed to raise standards in all our schools and give every child the opportunity to acquire the rigorous qualifications that will enable them to succeed in further and higher education and the world of work.”—[Official Report, 21 June 2012; Vol. 546, c. 1025.]
	However, I, along with the vast majority of educational professionals, can see the opposite happening. Rather than reducing educational inequality, the reforms that those in the Tory part of the coalition propose will do the opposite. Under the new proposals, around three quarters of pupils could sit tough tests modelled on the old O-level while the remaining pupils take more straightforward qualifications modelled on traditional CSEs in subjects such as maths, English and science. But separating 75% of pupils from the other 25% will do nothing but divide children into winners and losers at the incredibly young age of 14, capping aspiration and putting up a barrier to social mobility.
	Like my hon. Friend the Member for North West Durham (Pat Glass), I am a member of the Education Committee and visited Singapore earlier this year. Some children there go into the elite education programme at age 12 while the others are shoved down the technical route. We visited both types of schools and found that the facilities were very good. However, I was extremely saddened to hear young people talk of themselves as the elite. They are encouraged to talk themselves up, which is good, but what about the young people who are not the elite? If the Education Secretary wants to replicate Singapore’s system here, what would that contribute to equality of opportunity?
	This is not just a moral argument against segregating pupils; it is also an argument based on strong evidence. Relegating 14-year-olds to a lesser qualification brands them as underachievers and could drain both students and schools of any incentive to push for higher performance. If we move on to the CSE track a child who would otherwise be aiming for a C at GCSE, we may find that they are very likely to stop trying and not to value the qualification that they finally achieve. One third of children who score in the bottom 25% at 11 years old break out of that group by 16, but if they are placed in a second-class category at an early age they risk being written off. Quite simply, schools cannot predict with 100% accuracy the future of their pupils, and many will struggle to place children correctly.
	Once again, the north-east of England will bear the brunt of the Government’s changes, as research shows that the CSE will be most prevalent in northern towns. That the Secretary of State is intent on limiting the ambitions and opportunities for people in my constituency and many others throughout our region is shameful.
	While in office, Labour managed to narrow the educational gap between the rich and the poor, not through dumbing down, as Government Members like to believe, but through more investment in schools and teachers and through giving schools more freedom to innovate. Even the Secretary of State recognises that we have the best cohort of teachers ever, but that did not happen by accident. It was investment in their training, and excellent support in the classroom, that helped them to raise their game and to support our children as never before. That is what makes a real difference to our children’s education, not imposing outdated ideas that have already been shown to fail.

Gavin Barwell: This has been an historic debate, because for the first time the Front-Bench spokesmen on both sides of the House have acknowledged clearly and unequivocally a truth that has been obvious for a long time: our exam system, over a number of years, has been dumbed down. I give great credit to the hon. Member for Liverpool, West Derby (Stephen Twigg) for saying that clearly and unequivocally in response to my question.
	I was in the first year group to sit GCSE exams. My class did one O-level in January and eight or nine GCSEs in June. In the O-level, three of the class of 27 got an A grade; in every GCSE subject, a majority got A grades; and in some, almost every member of the class did. It was clear when GCSEs were introduced that it was easier to get top grades in them than in O-levels, and research by the university of Durham and feedback from employers and parents shows that there has been a further deterioration since then.
	The Secretary of State has already done a lot to try to address the problem in respect of the English baccalaureate, ending the modular system, re-sits, an emphasis on spelling, punctuation and grammar and by getting rid of some equivalents, but further measures are needed. It is good that there seems to be consensus on a single exam board and on ending the race to the bottom, so I shall focus on the main issue in the debate, the fear of a two-tier system, and say clearly and unequivocally that I do not want to go back to a CSE system.

Graham Stuart: Will my hon. Friend give way?

Gavin Barwell: I will not take interventions, for reasons of time.
	I do not want to go back to a CSE system, but we need the radical reform of our GCSEs in order to bring back a degree of academic rigour. The Education Committee Chairman made a very important point to the Secretary of the State about how raising the threshold will raise the number of people who succeed. I believe passionately, as a parent and from my experience of visiting schools, that paradoxically if we raise the threshold we will find that young people respond to it. That is the experience of schools that have switched to the IGCSE exam.
	In the briefing pack for this debate, I saw some research from King’s college, London, showing the decline in maths over the past 30 years, with many 14-year-olds not understanding concepts such as algebra and ratios. I am not satisfied that my nine-year-old is stretched at his primary school, so I work with him on his maths at home, and he has already grasped those topics. I do not think that he is especially bright or clever, but I passionately believe that our young people are full of talent, and if they are pushed and stretched they will respond.
	We also need to acknowledge that at 16 years old the right outcome for all our young people is not necessarily to sit a full suite of academic qualifications. For years and years this country has lacked a proper, respected vocational alternative, but if we secure such an alternative, we should not deride it as part of a two-tier system in which people doing vocational qualifications are somehow failures or second best.

Tristram Hunt: Like with CSEs.

Gavin Barwell: I am not talking about going back to CSEs, which were second-rate academic qualifications; I am talking about a system in which most children should be capable of getting robust academic qualifications and, through that, pushed to achieve their maximum. But we should recognise that it is not the right outcome for all young people, so there should be a proper vocational alternative, and we should not regard the young people who go down that route as failures or as second best in any way. I believe that absolutely passionately.
	I shall end my speech—I know others want to speak—with one final point. Changing our exam system is not in and of itself a solution to the problems that the Education Committee Chairman has identified, but it is part of the mix, alongside the other things that the Government are doing: getting the basics right in primary school so that everybody learns to read and can access the curriculum that follows; emphasising discipline so that young people can actually learn in the classroom; giving teachers the freedom to innovate within their schools; giving parents a proper and effective choice through the free school model; and, finally, setting a floor and saying to schools that do not live up to the minimum standards that we have a right to expect, “That’s not good enough. We’re going to bring in an academy to replace you.”
	That package of measures, together with a robust exam system, is what we need to give this country what it needs—the best equipped young people in the world.
	That is the only way to get the companies that will give us the jobs we want to locate themselves here, so we need to have the courage to bite the bullet and say openly, as both Front Benchers have for the first time today, that we have dumbed down our system over a number of years—not just under the previous, Labour Government; it has been going on for a long time—and that that process needs to be reversed. We need to bring back rigour, to provide a proper vocational alternative and to stop the sterile argument about a two-tier system.

Nicholas Dakin: Having a good look at our examination system is a valid thing to do. Indeed, the Chair of the Education Committee has reminded us that next Tuesday it will publish its report into the matter, and I know from my time serving on the Committee that it will have fully interrogated the issues and will produce a robust report to drive forward policy.
	Such a principled, considered approach contrasts with the Secretary of State’s way of doing business—by hunch, lunch and leak. Indeed, after sitting through 40 minutes of his speech today, I was still no clearer at the end about his proposals. It was a content vacuum, I am afraid, but things need addressing. Are there plans to scrap the national curriculum at 14 years old, and would that allow schools and colleges greater flexibility to offer a more skills-based curriculum to those young people who prefer a more practical, vocational approach? Will the millions of pounds—a sum that has doubled in the past 10 years—being spent on examinations be reduced?
	At the heart of the Secretary of State’s leak to the Daily Mail, there seemed to be a half-baked idea about some back to the future, imaginary utopia, enshrined in a return to O-levels and CSEs. I fear that that has far more to do with clever politicking than with intelligent policy making, however, and that the Secretary of State is keen to deliver soundbites for the Tory tabloids rather than sound policies for the young people of today and UK plc.
	It is all a bit like a Monty Python sketch in which someone says, “Exams were much harder in my day. I had to recite poems and parse sentences.” The reply would be, “Recite poems and parse sentences? You were lucky. I had to recite the complete works of Shakespeare and then write an essay on a day in the life of a pound note.” Seriously, however, people like to believe that things were harder in the past, although the evidence is far from clear, and the Secretary of State is tapping into a populist instinct: nostalgia politics.
	One of the few things I know a bit about is preparing young people for exams. I have prepared them for a range of exams: CEEs, CSEs, O-levels, A-levels, S-levels, AS-levels, BTECs. You name it, Mr Deputy Speaker, I have prepared young people for it, but in terms of setting and assessing standards, the worst exam that I ever prepared people for was O-level English, which was a total lottery, so if the Secretary of State thinks that going back to something like that will improve standards, he really is on another planet: planet dogma, or planet not in this place.
	When Sir Keith Joseph was introducing the changes, he made very clearly the case for their necessity, stating that
	“the system we propose will be tougher but clearer and fairer…it will be more intelligible to users…better than O-levels…and better than CSE…it will stretch the able more; and…stretch the average more.”—[Official Report, 20 June 1984; Vol. 62, c. 306.]
	I believe, from my professional experience, that that is what the GCSE has done. That does not mean it is perfect, or that it does not need improving, but any idea about going back to the 1950s, and to exam systems that may or may not have been appropriate for that time, is unfortunate.
	It is worth noting, however, that the debate about an exam at 16 years old is actually rather odd and anachronistic, because, with the raising of the participation age, the qualification that young people leave with at 18 years old is what really matters. Focusing so much attention on what happens at 16 misses the point, because with rising participation levels, the main thing is the skills, attributes and experiences that young people leave school with at 18 to allow them, one hopes, into a world of work.
	One of the big problems regarding aspiration for young people is the fact that young people’s unemployment is at a record high on this Government’s watch. That has a genuine impact on aspiration in classrooms. I am afraid that despite the skills, expertise and professionalism of those great teachers, led by great head teachers, up and down the land, that remains the context in which they are working. As people providing policy and governance, one of our gifts should be to produce a mechanism to enable young people to move into employment and ensure that they have the proper skills, attributes and aptitudes to do well in it.

Charlotte Leslie: I agree with my hon. Friend the Member for Croydon Central (Gavin Barwell) that this has been a historic debate. There has been a tendency for people in this country to live in a fantasy land. We think that as long as we allow grades to go up and tell ourselves it is okay, it is okay, but in an era of globalisation it is not enough to tell ourselves that everything is okay; it really has to be so. We have been doing this in relation to grade inflation and what we have been telling our young people. We have been saying, “Do this nice course—it’s all going to be fine and no one is going to tell you that you’ve done badly”, but reality has to hit them at some point, and that happens when they go out into the world of work and find that the cosy story they have been told behind their school gates does not match up to the reality outside. What the Secretary of State has said is therefore massively important. I am extremely pleased that the hon. Member for Liverpool, West Derby (Stephen Twigg) has acknowledged that grade inflation has been taking place.
	I would like the House to acknowledge that we have seen the creation of a two-tier system by stealth. Any two-tier system is bad, and this one has IGCSEs and the international baccalaureate for the well-off and the sharp-elbowed, with the less sharp-elbowed left with GCSEs, or their equivalents, that will not get them a job at the end of the day. That is absolutely appalling. No one can defend the status quo, and anyone who tries to
	do so has a much lower opinion of the country’s children than I do. I want to concentrate on a premise that underlies a lot of the debate about this two-tier system. Of course, every child must have the opportunity, and must be pushed, to do the best they can at core academic subjects; I am a great supporter of the E-bac in that respect. However, to suggest that unless a child does those core subjects they are thrown on to the scrap heap, as Labour Members have repeatedly have done, betrays an extraordinary attitude towards so-called vocational education.
	Again, I agree with my hon. Friend the Member for Croydon Central. If we did not have people who did not find grammar and algebra books the most interesting thing in the world, we would not be standing in a building that is so intricately and beautifully built, with incredible craftsmanship. I object to the term “vocational”, which has arisen in the past decade or so, because it is a euphemism that betrays a slight embarrassment about the kinds of skills that have made our cities and our country great, and a reluctance actually to name practical, manual and technical skills, crafts and tradesmanship. In future, I should like the term “vocational” to be abolished and replaced with something far more honest. In terms of equivalence, we have been doing nothing for tradesmanship, craftsmanship and so-called vocational trades and everything for academic qualifications. Nail technology is not studied to get a job, because there are not enough nail technology jobs to go round for all the hundreds of thousands of people who are doing these courses. It has been all about the exam results, not the jobs.
	There has been an overwhelming need to get real, and the Secretary of State’s bravery in tackling the underlying problems in our GCSE system is a welcome attempt to do so. I hoped for a moment that Labour Members had got real, but it seems that they may not have done.

Nia Griffith: I am certainly not against change. As a former teacher, examiner and Ofsted inspector, I spent a lifetime trying to raise standards of teaching and learning and to develop programmes of study that better prepared pupils for the modern world so that, for example, in foreign languages we moved on from talking about boys falling out of cherry trees to teaching children realistic phrases that they could use in business and leisure situations.
	Did I detect the Secretary of State retreating from the position attributed to him in the press last week? Did he really say that he was not going for a CSE/O-level divide? I am not sure. I remember, though, that back in 1981, well before the GCSE was rolled out nationwide, I was piloting the 16-plus. That is because we believed very much in piloting things to see how they worked out and what the problems were. We were trying to put together two very different examinations, with a D grade being attributed to pupils of average ability. That is how we got to the system whereby the A to C grade was seen as the superior way of designating some children, with D to G grades for the rest, and with the foundation and higher papers. I make no apology for that; it is the history of how it came about. It is extremely difficult to set questions that will stretch a very able pupil but not prove to be complete gobbledegook, and a complete deterrent, to the very least able, and that was the point
	of having different papers. The key thing was that right up until March or April, pupils could move between the examinations that they were going to take in June. That was very important because it gave everyone an incentive to keep working the whole time and not to think, “Oh well, they’re only CSEs, so I don’t need to work so hard.”
	I have serious worries about the introduction of a dual system. For example, in small subject areas such as music or a second foreign language, children of a larger range of ability are often taught in the same class. Will they now have to be taught two different syllabuses, or programmes of study, because one class will include the more able and the less able, with some going in for a CSE and some going in for an O-level? In smaller schools, that will affect not only small subjects but mainstream subjects. It may be very difficult to accommodate everybody. The teacher might have to run about trying to cope with two programmes of study at once, or perhaps some pupils will be discouraged from taking the subject having been told that they can do it only if they are capable of doing the O-level-type examination.
	Dual entry could arise, because a child who might fail the more difficult O-level-equivalent exam would therefore do the CSE as well. A lot of money is already spent on examination fees, and dual entry is extremely expensive. As well as creating additional costs, it would place a lot of extra pressure on children and staff. There is a danger that children will suddenly not be given a chance to do the more difficult exam and be withdrawn because they might mess up the results. There would be the sheer disruption of introducing two completely new examination systems when there are many simpler and more effective ways of raising standards.
	I do not understand the Secretary of State saying that people in this country do not re-sit English and maths, because they certainly do. When we go to any institution for 16 to 18-year-olds, we will find people making sure that they give every pupil the chance to get the A to C grades in English and maths that are so essential to their going on to their future careers or university courses. On international comparisons, it is not at the top end of the ability range that we do so badly in this country, but at the middle and lower ends. Creating segregated systems will do nothing to improve the morale of the middle-ability and less able pupil; in fact, it will do precisely the opposite.
	As regards examination boards, the Secretary of State alleged that there had been some shopping around to find the system that provided the highest grades for the least effort. It is true that there has been some choosing of different programmes of study, perhaps because some are more inspiring or user-friendly to the pupil. I am not against having more than one examination board, but will the Secretary of State please confirm that we are not going to have separate examination boards for different subjects, which would be an examination officer’s nightmare? I also plead with him to allow some space for innovation. Having different examination boards has allowed us to innovate without a 100% roll-out.

Kevin Brennan: We have had a fascinating debate, with contributions from 13 hon. Members: my hon. Friend the Member for North West Durham (Pat Glass), the hon. Member for Beverley and
	Holderness (Mr Stuart), my hon. Friend the Member for Leicester West (Liz Kendall), the hon. Member for East Hampshire (Damian Hinds), my hon. Friend the Member for Blackpool South (Mr Marsden), the hon. Member for North Cornwall (Dan Rogerson), my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), the hon. Member for Hexham (Guy Opperman), my hon. Friend the Member for Stockton North (Alex Cunningham), the hon. Member for Croydon Central (Gavin Barwell), my hon. Friend the Member for Scunthorpe (Nic Dakin), the hon. Member for Bristol North West (Charlotte Leslie) and my hon. Friend the Member for Llanelli (Nia Griffith). It has been an interesting, although not entirely illuminating, debate.
	The Opposition have no disagreement with the case that there is a need to reform the GCSE. As the House knows, the GCSE was first sat by pupils 25 years ago. I was teaching at the time. The idea that the world has not changed sufficiently since then for the GCSE to require reform is as ludicrous as the idea that the world is sufficiently similar to how it was 50 years ago that we have to return to O-levels and CSEs. The raising of the education and training leaving age to 18 raises the fundamental question of what public examinations we need at 16 and what they are for. That is a legitimate debate. One hon. Member asked whether we need to spend the huge amount of money that we spend on examinations at the age of 16. We have to ensure that GCSEs are fit for purpose, but we do not need to go back to the future.
	In the words of the Deputy Prime Minister, we do not need to recreate
	“a two tier system where children at quite a young age are somehow cast on a scrap heap”.
	The more observant hon. Members will have noticed that we included those words in our motion. However, the Government amendment, which is signed, among others, by the Deputy Prime Minister, would expunge those words from the motion. That is a novel approach. It might well be first time that a senior Cabinet Minister has tabled an amendment to delete his own words.

Dan Rogerson: There would be a problem if the Deputy Prime Minister had said something in the amendment that disagreed with what he said before. The amendment has a different emphasis, but there is no contradiction between the two.

Kevin Brennan: In that case, the Deputy Prime Minister could have left his own words in the amendment that he signed, but he chose to delete them. I am tempted to say, in the words of the late, great Amy Winehouse, “What kind of Lib-Demery is this?” Let us allow for a moment the notion that the Deputy Prime Minister meant what he said about a two-tier system, despite trying to delete his own words from the motion.
	The Government amendment appears to contradict the leaks from the Secretary of State’s advisers last week that he would not need parliamentary approval or Lib Dem support for his proposal to bring back CSEs and O-levels. We have it from the Financial Times that Downing street now insists that the Secretary of State cannot go ahead without approval with the proposals that he leaked to the Daily Mail last week. The Financial Times article goes on to say that
	“the idea of a lower qualification for less academic children”
	is “dead in the water.” Perhaps when he responds, the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) will confirm whether that idea is dead in the water. If it is, why are the Secretary of State’s advisers at this moment spinning to the press lobby in the House of Commons that a lower qualification known as an N-level will be introduced—something that he did not announce to the House?
	The Minister needs to come clean when he winds up. Is the two-tier plan that was leaked to the Daily Mail by the Secretary of State’s closest advisers dead in the water or not? Is it full steam ahead for the Secretary of State, or is this a humiliating climbdown? The Secretary of State was asked on three occasions—or as he would say, thrice—whether the Daily Mail report was wrong, and thrice he demurred and did not tell us. If he is making a humiliating climbdown, he must apologise to all his friends who came out in support of the proposals in the media.
	The manner and timing of the leak to the Daily Mail were a disgrace, at a time when students up and down the country, who have been working hard for months on end, were sitting their GCSEs. What a contrast that is to the way in which the GCSE was introduced all those years ago. A debate was kicked off in 1976 by Jim Callaghan, the former Labour Prime Minister. It was developed by Shirley Williams, although she has gone off the tracks a little since then. Come to think of it, we have not heard much from her on this subject. It would be interesting to know what she thinks. The idea was picked up by Keith Joseph—that well known lily-livered, liberal, loony lefty—and implemented by Mrs Thatcher’s Education Secretary, Kenneth Baker, following thorough debate and consideration. It was welcomed across the House.
	In contrast, we now have a proposal to rip up the GCSE, with accompanying disparaging rhetoric, cooked up by a cabal, no doubt using private e-mail accounts, with no reference to the Department’s officials or to other Departments, and kept secret even from one of the Secretary of State’s Education Ministers. What a ludicrous way to run a Department that is, and how symptomatic of the Secretary of State’s seething lack of trust in his own Minister and officials.
	At least we can assume that the Secretary of State would be kinder to and have more faith in those on his own side. Not so, because we now find out that not even the Prime Minister knew the details of what he was about to leak to the Daily Mail. A Downing street spokesman told the Financial Times:
	“It looks as if we’re being bounced into something we weren’t prepared for.”
	What about the Education Committee, which is chaired ably by the Secretary of State’s Conservative colleague, the hon. Member for Beverley and Holderness, who as always made a thoughtful contribution today? Let us be clear that the Chair of the Select Committee is no fan of Labour education policy. We have had many discussions about it and, to save him any embarrassment, I confirm that he is no fan of Labour education policy. Nevertheless, we respect his long-standing commitment to raising the standards for those at the bottom. As the Secretary of State well knows, the Committee is at this moment undertaking a review of qualifications and examinations that seeks to address some of these questions. What contempt the Secretary of State has shown for the
	Education Committee by publicising his plans in the press without any consideration of the Committee’s work. I took a sharp intake of breath when the Secretary of State said to the Chair of the Select Committee in the debate, “If the cap on aspiration fits, wear it.” That was uncalled for and was off the mark with regard to the hon. Gentleman’s commitment to helping those at the lower end. However, I know that he needs no help from me.
	I met the CBI earlier today. Like us, it thinks that the GCSE needs to be looked at again. Like us, it thinks that a much wider debate is needed than the headline-grabbing call for a return to O-levels and CSEs that we have had from the Secretary of State. GCSEs are not, despite the impression that the Secretary of State tried to give last week, a worthless piece of paper, but that is exactly how Kenneth Baker described CSEs, which the Secretary of State last week seemed so keen to bring back. As my hon. Friend the Member for Scunthorpe pointed out, many O-levels were not rigorous qualifications, but required little more than a Gradgrindian regurgitation of facts. Factual knowledge is not enough in a world in which, as the CBI told me today, more data will be created this year than have been created in the previous 5,000 years. Rote learning is insufficient in a world that needs citizens who can process intelligently a mass of information and data in their daily lives. We need breadth and balance in the curriculum.
	The GCSE was brought in not as a single examination paper, as some Government colleagues seem to think, but as a single examinations system that would give everybody the chance to succeed if they reached the required standard. That is a principle worth preserving. Reform, yes; back to the future, no.

Nick Gibb: This has been a good debate, but as my hon. Friend the Member for Bristol North West (Charlotte Leslie) pointed out, we need a reality check. The overarching objective of the Government’s education policy is to close the attainment gap between those from wealthier and those from poorer backgrounds, which is wider in this country than in many of our competitor nations. The gap means that 49% of pupils eligible for free school meals achieved a grade C or better in GCSE maths last year compared with 74% of all non-free school meal pupils; that 67% of pupils eligible for free school meals achieved the expected level in reading when they left primary school last year compared with 82% of non-free school meal pupils; and that just 8% of pupils eligible for free school meals were entered for the English baccalaureate combination of core academic GCSEs compared with 22% overall.
	That attainment gap is morally unacceptable and, as my hon. Friend the Member for Bury St Edmunds (Mr Ruffley) said, economically damaging to this country. It has all the hallmarks of the two-tier education system that hon. Members say they wish to eliminate.

Tristram Hunt: Will the Minister give way?

Nick Gibb: I will not give way because of the time.
	Under the previous Government and that two-tier system, a sizeable proportion of young people were persuaded to take qualifications that scored highly in
	performance tables, but that turned out to have less credibility with employers than the young people had been led to believe, as so aptly pointed out by my hon. Friend the Member for Bristol North West. That is why, on the recommendation of Alison Wolf, we have looked again at all vocational qualifications taught in schools to ensure that only those highly valued by employers count in performance tables. That will raise both the value and the esteem of the vocational qualifications taught in our schools, which is supported by my hon. Friend the Member for Croydon Central (Gavin Barwell).
	Last year, the OECD produced its seminal report, “How do some students overcome their socio-economic background?” It states that, in Britain, only a quarter of deprived children were able to overcome their background in terms of academic achievement, compared with more than 70% in Shanghai and Hong Kong, which places Britain 39th out of 65 OECD countries.
	Addressing those inequalities lies at the heart of every radical education reform implemented, announced or mooted by the Government since May 2010, which includes: the academies and free school programmes, which bring professional autonomy and diversity to our school system and raise standards in some of the most deprived parts of the country; the focus on phonics in reading and the phonic check—we last week checked the basic reading skills of every 6-year-old in the country—which mean that no child slips through the net with their reading problems unidentified; ending the re-sit culture and modularisation in GCSEs; restoring marks for spelling, punctuation and grammar; the pupil premium, which provides significant extra school funding for pupils who are eligible for free school meals; allowing good schools to expand; raising the floor standard of underperforming primary and secondary schools; giving more power to teachers to tackle unruly behaviour; reviewing the national curriculum; publishing draft primary school programmes of study in English, maths and science; and putting greater emphasis on reading, scientific knowledge, languages, arithmetic and the essentials of grammar, spelling and punctuation.
	Those are the important reforms, but as my right hon. Friend the Secretary of State has said, the evidence shows that we must go further. A few weeks ago, a CBI survey showed that nearly half of all employers were unhappy with the basic literacy skills of school and college leavers—35% expressed concern over maths. This week, King’s College London reported that teenagers’ maths skills have declined over the past 30 years.
	The Government are clear that we need fundamental reform. We want a broad, inclusive conversation to consider how we address the concerns of employers, parents, pupils and schools. We must learn our lessons not from the past, but from the best—from countries such as Singapore, where students are required to have a proper knowledge of syntax and grammar, an understanding of the scientific laws that govern our world, and an understanding of maths, which allow them to progress down both technical and academic routes. None of that is beyond the children of this country, but we too often lack the most basic aspiration on their behalf.
	In Singapore, the exams designed for 16-year-olds are rigorous, academic, stretching and comprehensive. They are taken by the vast majority of the population. Those exams—O-levels drawn up by examiners in this country—
	set a level of aspiration for every child that helps to ensure that Singapore remains a world leader in education. We want to ensure that children in this country have exactly the same opportunities as their peers in Singapore and other high-performing nations; that our pupils are as comprehensively equipped to compete in a world of international commerce; that every single child has the opportunity to succeed to their full potential.
	The Government’s reforms are designed to achieve a fundamental change in expectation and academic achievement. We should expect all schools to have the academic attainment of Mossbourne academy. We want our qualifications to be world class, with the expectation that all will study for them, and that the great majority will achieve them, if not by aged 16, then by 17, 18 or 19.
	The hon. Member for Liverpool, West Derby (Stephen Twigg) made a revealing speech. I am not aware of any Education Minister from the previous Labour Government who would accept the existence of grade inflation in GCSEs. His acceptance of that and his change of view are welcome—they help to bring honesty and candour to the debate.
	My hon. Friend the Member for Beverley and Holderness (Mr Stuart), in seeking to defend himself from accusations of fatalism, spoke of establishing a route map from point A to point B—good luck with that—and sought more detail on the Government’s proposals before the publication of our consultation document, while refusing to give the Government a glimpse of the Education Committee’s forthcoming report on qualifications, which is due out next week.
	I welcome the support of the hon. Member for Leicester West (Liz Kendall) for the single exam board proposal and wholeheartedly congratulate New College school on its transformation, and on the “yes you can, yes you will” ethos.
	My hon. Friend the Member for East Hampshire (Damian Hinds) raised concerns about grade inflation, early entry for GCSE, re-sits and modularisation, and rightly pointed out that today we have a clear, two-tier GCSE system, which he called a rebranded CSE and GCE system. He revised the phrase made famous by Melanie Phillips—“All must have prizes”—by saying that all must merit prizes.
	I welcome the support of my hon. Friend the Member for North Cornwall (Dan Rogerson) for rigour. He is right to be reassured about genuine consultation. The hon. Member for Stoke-on-Trent Central (Tristram Hunt) falsely accused my hon. Friend the Member for Grantham and Stamford (Nick Boles) of earning his crust, but I welcome the hon. Gentleman’s support for the English baccalaureate and for children acquiring knowledge in history and learning poems by heart. I take on board the caution of my hon. Friend the Member for Hexham (Guy Opperman) against change for change’s sake.
	The Government are accused of wanting to create a two-tier education system, but this country already has one, which we believe is letting down too many children and young people. Professor Wolf said in her important review of vocational education that English and maths are fundamental to young people’s employment and education prospects, yet less than half of all students have good GCSEs in English and maths at the end of
	key stage 4. There are two tiers: those with English and maths, and those without. There are two tiers in the current structure of GCSEs—a foundation tier and a higher tier—including in English, maths and science. The highest achievable grade in ordinary circumstances in the lower tier is C. We have two tiers in the grading system, with 19% of pupils achieving grades E, F and G in GCSE Maths, and 11% of pupils achieving those grades in English.
	We need to ensure that our exams are on a par with those in the highest performing countries in the world, and that our schools are delivering the kind of education that equips and prepares all pupils to take and excel in those exams. That is what the Government mean by closing the attainment gap. I urge the House to reject the cynical motion tabled by the Opposition and to support the radical education reform agenda being delivered by this Government to ensure rigour and high expectations for all young people in this country.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
	The House divided:
	Ayes 222, Noes 298.

Question accordingly negatived.
	Question put forthwith  (Standing Order No. 31(2)), That the proposed words be there added.
	The House divided:
	Ayes 298, Noes 217.

Question accordingly agreed to.
	The Deputy Speaker declared the main Question, as amended, to be agreed to. (Standing Order No. 31(2)).
	Resolved,
	That this House notes the forthcoming consultation on the secondary school qualifications and curriculum framework; welcomes the opportunity to address the weaknesses of the system introduced by the previous Administration, which undermined confidence in standards, increased inequality and led to a reduction in the take-up of core subjects such as modern languages, history, geography and the sciences; and calls for proposals which are approved by Parliament and which are based on the principles of high standards for all, greater curriculum freedom, and a qualifications and curriculum framework which supports and stretches every child and which boosts social mobility.

Defence Reform

Kevan Jones: I beg to move,
	That this House recognises the need for defence reform; notes with concern the speed and depth of redundancies and the threat to historic regiments and battalions; supports the armed forces covenant but is anxious about the implications of changes to Service pensions and allowances and the effect of these and other measures on morale; further recognises the necessity of an advanced equipment programme but is worried about capability gaps, notably carrier strike; calls on the Government to end disadvantage and discrimination against the Service community in order to strengthen the covenant; and further calls on the Government to reassess the assumptions on which the Strategic Defence and Security Review was based.
	Let me begin by acknowledging the courage and professionalism of our armed forces and recognising the invaluable support provided to them by their families. I know that that sentiment will be shared by all Members in the House. We ask servicemen and women to risk making the ultimate sacrifice, and to forgo many freedoms in the name of our national security. Their contribution to our safety must never be forgotten or underestimated.
	Opposition Members recognise that our armed forces cannot be allowed to stand still. The combination of changing threats in an increasingly uncertain world with budgetary challenges means that we must be ahead of the curve in terms of technology and the tactics that we apply. We must be bold and practical in order to create an efficient fighting force which serves the primary requirement of our national security while also ensuring that we do the right thing on behalf of our servicemen and women and their families.
	The major conflicts of recent history are drawing to a close. Meanwhile, a wave of popular uprisings throughout the middle east poses new challenges, as do new technologies and threats from cyber. Global changes will alter the balance of power, risk and how resources are allocated in the modern world. That is why Opposition Members support armed forces reform. Since May 2010, we have not opposed the Government simply for opposition’s sake. National security and support for our armed forces are worth more than cheap political point-scoring, although when we believe that the Government have made an error or strayed from their pre-election pledges, we will righty criticise and scrutinise their decisions.
	We welcome the coalition’s commitment in 2010 to launch the security review. It built on the Green Paper published by the last Government, and our commitment in the last Parliament to undertake a defence review. Unfortunately, however, the one thing the coalition Government’s strategic defence and security review was not was strategic. The SDSR has unravelled quickly, displaying the same short-term, ad hoc and rushed decision making that is becoming characteristic of many areas of Government policy. The decisions that have been taken have left Britain with serious gaps in its defence capability. Events in the middle east last year—the Arab spring uprisings—were not foreseen, which meant the review was rendered out of date almost as soon as it had been printed. The Government were forced to use resources they had planned to scrap and bring back capability at very short notice.

James Gray: The motion calls for a reassessment of the “assumptions” on which the SDSR was based. Which assumptions does the shadow Minister not agree with?

Kevan Jones: I know the hon. Gentleman takes a close interest in defence issues, but if he had read the Green Paper he would have seen that it takes a strategic look at the world. The SDSR was very rushed, and did not have the long public consultation and engagement with stakeholders that the 1998 review had. It was basically a Treasury-led review, which has resulted in some strange decisions that I shall describe later, which have affected the capability and capacity of our armed forces.

James Gray: I am simply focusing on the word “assumptions”. In the motion, the Labour party criticises the assumptions that lay behind the SDSR. My opinion is that those assumptions are absolutely fine—although I agree with the hon. Gentleman that some of the other detail was not so good. Which of the assumptions behind the SDSR does he not like?

Kevan Jones: I would talk about the developing situation in the middle east, some of the decisions made post-SDSR in taking away maritime capability, and the whole issue of the deployability of our armed forces. All those decisions were taken within a financial straitjacket, instead of addressing questions such as where we need to deploy in the world and what our priorities are. That has overridden the security needs that are so vital and that were outlined so well in the Green Paper.
	As a former Ministry of Defence Minister, I know only too well that the easiest ways to make the kind of in-year savings in the defence budget that are being demanded by the Treasury are to scrap capability or to make personnel cuts. However, the Government have scrapped important capabilities—Nimrod and the Harrier fleet—without any plans as to how they will be replaced. It appears that Ministers have been inflexible in their pursuit of short-term savings at the expense of our long-term security. Too often we are given the impression that the Government are presiding over decline, rather than planning for the future. The Government must reassess the security and spending assumptions on which the review was based.

Bernard Jenkin: How would a Labour Government have dealt with the £38 billion overhang that the Conservatives inherited from the previous Labour Government? Also, is the hon. Gentleman saying he would, in fact, spend more on defence than the current Government? He should be explicit about that, but his motion is not explicit.

Kevan Jones: I am glad the hon. Gentleman has asked about the £38 billion black hole, because it has become folklore, but the Government have not produced any evidence to justify that figure. Let me quote from an excellent Defence Committee report—which I am surprised he has not read as he is a former member of that Committee. It says:
	“We note that the MOD now state the genuine size of the gap is substantially in excess of £38 billion. However, we also note the Secretary of State’s assertion that the ‘for the first time in a generation, the MOD will have brought its plans and budget
	broadly into balance, allowing it to plan with confidence for the delivery of the future equipment programme’. Without proper detailed figures neither statement can be verified.”
	We should also consider the evidence given to the Committee by the then Secretary of State. He promised the Committee he would give details, but the final report states, at paragraph 205:
	“We are surprised that this assessment has not yet begun and expect to receive a timetable for this exercise in response to this Report.”
	The £38 billion figure has been bandied around ever since it was spun out of Conservative central office in the election campaign. The Government have been asked on numerous occasions to justify it, but they have not done so. They should.

Nick Smith: On the subject of wasting taxpayers’ money, the Government said last week that almost £39 million had been spent on preparing the carriers for “cats and traps” and the variant carrier aircraft, but the media says a quarter of a billion pounds have been spent. How much money does my hon. Friend think the Government have wasted?

Kevan Jones: As with the £38 billion figure, the Government are very good at not explaining their mistakes. The original figure was, I think, £37 million. It then rose to £39 million, but the MOD subsequently briefed that it was £100 million. However, some informed sources say that it could be upwards of £250 million. The Government should state how much was spent in respect of that disastrous decision, which was taken at a time when the defence budget was experiencing savage cuts. They seem to have swept this matter aside, however, as if it is not important.

Andrew Robathan: The hon. Gentleman is right: £38 billion is a huge amount of money. However, I should draw his attention to a note entitled:
	“Note to Ed Miliband: Defence team work update”.
	It states that Labour needs to be
	“credible on defence spending and neutralising the ‘£38bn’ charge, which is our biggest weakness.”
	So the Labour Defence team think that that charge is Labour’s biggest weakness.

Kevan Jones: The Minister is making various assumptions, which is not unusual for him. That note says precisely what I am saying today, which is that we need to shoot down this erroneous myth that has been put about by this Government. If he wants more evidence on this, he should read the National Audit Office “Major Projects Report 2009”. It says of the defence budget:
	“The size of the gap is highly sensitive to the budget growth assumptions used. If the Defence budget remained constant in real terms, and using the Department’s forecast for defence inflation of 2.7 per cent, the gap would now be £6 billion over the ten years. If, as is possible given the general economic position, there was no increase in the defence budget in cash terms over the same ten year period, the gap would rise to £36 billion.”
	Even the NAO did not reach the £38 billion figure, therefore. I acknowledge that the figure it gives is £2 billion out and this Government seem to think such sums are
	unimportant, but I have just quoted from the NAO report. That is possibly where Conservative central office first got the figure of £36 billion, but there is a big difference between £36 billion and £38 billion. The £36 billion is based on an assumption of a flat-cash budget over the next 10 years and every single item in the equipment budget being maintained, when everyone who has ever been involved in MOD matters knows that things come into the equipment budget and things fall out of the equipment budget.

Madeleine Moon: The Defence Committee was advised in one of its briefings that the projected figure of £38 billion included a roll-forward of all items on wish lists—not things for which contracts had been let, but items the MOD had expressed a possible interest in purchasing for the future. This was, we were told, the equivalent of an individual becoming bankrupt because they fancied buying a Ferrari but never actually bought one.

Kevan Jones: I thank my hon. Friend for that. Let me quote from the evidence given to the Select Committee by the former Secretary of State. In response to a question from a Member, he said:
	“There is a huge ability to reduce a very large proportion of that. My guess is that of that £38 billion we are talking of something like £8 billion to £9 billion, and that is a ballpark figure.”
	During that evidence session, he gave a commitment to the Select Committee Chair that he would write giving details of how he arrived at that figure, but he did not. The Committee was still waiting for that information when the report was produced, but it did not appear. I heard one of the Government Front Benchers scoff when I said that certain things move in and out of budget, but they clearly do. My hon. Friend the Member for Bridgend (Mrs Moon) is right: the Government racked up everything in the programme over a 10-year period and assumed that it will all be delivered. That is similar to the argument used about pension black holes, the assumption being that all the money is paid out, today. That is not the way the defence procurement budget is structured.

Bob Ainsworth: The Government obviously intend to keep the myth going, and who could blame them for that? However, can my hon. Friend explain how, on two separate occasions—we should remember that this Government have only been in power for a little over two years—two separate Secretaries of State can have claimed that the £38 billion gap has already gone and that the budget is now in balance? If the imbalance was as large as they alleged, how on earth have two separate Secretaries of State been able to claim within two years that the budget is in balance already?

Kevan Jones: My right hon. Friend, like me, knows the MOD budget very well. Clearly, what the Government have done is to take out in-year capability. We should also remember the reductions in armed forces personnel—the people who are paying for some of this. My right hon. Friend is correct: the idea that such a big black hole can be filled in two years is complete nonsense. [ Interruption. ] The Under-Secretary, the right hon. Member for South Leicestershire (Mr Robathan), says that it is 10 years, but that is not the impression the Government
	have been giving. All their decisions, such as slashing personnel numbers, are predicated on this £38 billion black hole. Earlier last year, the previous Secretary of State stopped using that figure—for a while. Suddenly, under the new Secretary of State, it has come back. The Government have got to explain their use of it, because it is the entire raison d’être for some of the cuts they are making.

Bernard Jenkin: I remind the hon. Gentleman, the right hon. Member for Coventry North East (Mr Ainsworth) and the hon. Member for Bridgend (Mrs Moon) that the £38 billion figure was furnished to the Defence Committee under the previous Labour Government when the hon. Gentleman was a Minister in the Ministry of Defence. At the same time, Mr Bernard Gray produced a report saying that, on present plans, the MOD could order no new equipment at all for the next 10 years, so dire was the state of its finances. It is only by bringing defence spending within the Department back into balance that any new equipment has been able to be ordered at all.

Kevan Jones: I am sorry but that is complete nonsense. The hon. Gentleman should read the NAO report that I referred to earlier, which makes the assumption that many people have made in respect of flat cash. I will read the quote again, because he has obviously not picked up the argument:
	“The size of the gap is highly sensitive to the budget growth assumptions used. If the Defence budget remained constant in real terms, and using the Department’s forecast for defence inflation of 2.7 per cent, the gap would now be £6 billion”.
	There is a huge difference between £6 billion and the £38 billion figure that the Government are claiming. Even if, in line with the NAO report, we assume a flat cash budget for 10 years, we only get to a figure of £36 billion. Where the Government get the extra £2 billion from, I do not know. This issue was also dealt with in Bernard Gray’s report, and as my hon. Friend the Member for Bridgend said, the £38 billion figure is based on the principle that every single piece of equipment that was planned for would actually be delivered. However, anyone who knows the defence budget knows that that is not how things work. [ Interruption. ] I am sorry, but the £38 billion figure is a fiction, and this Government have got to justify it, because they are using it to justify some of their most draconian cuts, not only in equipment but to the service terms and conditions of members of our armed forces.

Christopher Pincher: The hon. Gentleman seems to accept that there is a gap and that it could be up to £36 billion. What is the gap?

Kevan Jones: Let me read what the NAO report says—for the third time:
	“The size of the gap is highly sensitive to the budget growth assumptions used. If the Defence budget remained constant in real terms, and using the Department’s forecast for defence inflation of 2.7 per cent, the gap would now be £6 billion.”
	The figure of £36 billion is reached only if flat cash over 10 years is included. Ministers said that the £38 billion figure is over 10 years—that is not the impression they have been giving to the media, the armed forces and the public. Instead, they have been suggesting that we somehow have to lay our hands instantly on £38 billion. As my
	right hon. Friend the Member for Coventry North East said, the idea that that figure can be wiped out in two years is an accounting fantasy.

Mark Lancaster: Listening to this debate, the one thing that is clear and that the hon. Gentleman accepts is that there is a gap, be it £6 billion or £38 billion. Given that there is a gap, why did the last Government not balance the budget?

Kevan Jones: We were on line in that regard. One of the jobs that my right hon. Friend the Member for Coventry North East gave me when he was Secretary of State—it was something of a poisoned chalice—was to draw up some reductions. Just before the general election, I had already identified some £1.2 billion of savings, but some of that involved investing money in order to save it. The problem at the moment is that the Treasury want instant cash out of the budget, and the only way to do that is to slash personnel and equipment straight away. The more sensible approach that we were going to implement was a planned phase of three to five years, involving some investment and some reductions. That is in stark contrast to the Government’s approach. What is driving this process is not defence strategy but the desire of this Government and the Treasury to take 8% out of the budget in years one and two. That has led to the short-termism we are seeing now.

Mel Stride: If the gap is a mere £6 billion, as the hon. Gentleman is suggesting, does he believe that that in itself is acceptable—yes or no?

Kevan Jones: Yes, because some of the programme was not committed. The former Secretary of State was asked by the Defence Committee how much of that budget was committed, and quite a large portion of it was not. One approach could be to delay projects, as this Government and the previous Government have done, or to cancel them.
	When the previous Secretary of State took office, he said that he was going to save a load of money by renegotiating contracts with various suppliers. We have yet to see a single example of his having been able to renegotiate procurement contracts and make great savings. [ Interruption. ] I am sorry, but I am not going to take any lessons from the Conservatives on the carriers, given that they have wasted upwards of £100 million through a decision that—[ Interruption. ] The Opposition are shouting, but I do not remember either the Minister for the Armed Forces, the hon. Member for North Devon (Nick Harvey), or the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire, saying when in opposition that the carriers should not be ordered. That is the problem: they were calling then not only for the carriers, but for a larger Army and a larger Navy, but now that they are in government they are doing completely the opposite.

Dan Byles: Is the hon. Gentleman interested in the fact that the Royal United Services Institute, which is known for being a very independent-minded organisation, stated in September 2011:
	“Whichever detailed assumptions are made, however, there was no doubt that the funding gap was large and real. It would take considerable energy, and political cost…to escape from…It was, in a very real sense, a black hole.”?

Kevan Jones: That is fine—[Interruption.] Well, it is fine; if it was true that the previous Government were doing nothing to address the situation, that would not be the case. But if the Government are going to claim that the black hole is £38 billion, there is an onus on them to explain in detail exactly how they arrived at that figure, because they are using it to justify every single reduction in defence expenditure that they are making. It is important that they do that. We had plans to balance the budget.

Christopher Pincher: The hon. Gentleman seems to be accepting that there is a black hole. He denies that it is a £38 billion black hole, but he will not say whether it is a big black hole or a little black hole. What was the size of his black hole?

Kevan Jones: The last Labour Government were committed to looking for efficiencies and reviewing the procurement contracts. So some of the things that were planned would not have been procured, which would have closed that black hole to which the hon. Gentleman refers. [Interruption.] He asks me what the size of the black hole was. He and others have kept saying it is a £38 billion black hole, but if that is the Government’s sole justification for what they are doing, they should have the guts to explain it to the public.

Valerie Vaz: One of the battalions that recruits from my constituency, 3rd Battalion the Mercian Regiment, is one of only two specialised mechanised infantry battalions. It is due to be disbanded under the current proposals, so is it a proper use of public money for it to be disbanded only for these specialised services to have to be recruited again?

Kevan Jones: There are so many leaks coming from the Ministry of Defence, some official and some unofficial, and it is not helping the process. We are seeing a ludicrous situation whereby in order to claim that the headcount of MOD civil servants, in particular, is being reduced, people are being made redundant only then to be rehired as consultants, at huge cost to the taxpayer.
	Last month, the Secretary of State told the House that he had brought the MOD budget “back into balance”. Every announcement or decision made by the Government is based on that claim; he says that he has “balanced the defence budget”. However, unless we get hard evidence soon, it will remain impossible for us to believe those claims. Ministers must be honest with our armed forces men and women, who deserve to know the full picture of the MOD budget so that they can understand why they are having to undertake the pain that they are taking under this coalition Government.

Mark Menzies: The hon. Gentleman has said that the previous Labour Government had looked at making £1.2 billion-worth of cuts. Will he share with the House details of where those cuts would have fallen?

Kevan Jones: One example is that we would have taken some strategic decisions on basing around the world. I must say that, in the spirit of co-operation, I gave one of the papers to my good friend the hon. Member for Aldershot (Mr Howarth) to assist him in the process. Some efficiency savings could have been made, including
	some through restructuring the Army and other things. The other point to make is that some of these things also needed investment, and I had been given clearance by the Treasury in some areas to invest to make longer-term savings. They were not just in-year savings to try to satisfy the Treasury and the deficit reduction programme on which this Government are embarking.

Pete Wishart: Can we leave black holes to one side for the minute and concentrate on the Black Watch? On Saturday, the colours of the Black Watch were lowered for the last time, marking its passing as a regiment. It was the Labour party that amalgamated the Scottish regiments and they are fighting for their survival now as a battalion with cap badges, insignia and the heritage and culture that has been maintained. The Labour party moots a threat to the battalions and our regiments, so will it support us in ensuring that their survival continues and that the fantastic heritage and culture will be continued in the Royal Regiment?

Kevan Jones: I understand people’s emotional attachment to the regiments, and I understand the proud traditions and how they are held. However, I must say that I always find the Scottish National party talking about this issue difficult. If we had an independent Scotland, not only would many of these regiments doubtless have their cap badges removed, but they would be abolished altogether. The SNP’s so-called “campaign” on this issue is a little hollow, to say the least. The SNP needs to explain exactly what the new Scottish armed forces would be if Scotland were to be independent. Would the Navy be something like fishery protection vessels? Would the Army be downgraded to some type of border force to patrol the border between Scotland and Northumberland? [Interruption.] The hon. Gentleman comments from a sedentary position, but the SNP claims to be supporting these regiments and the onus is on him to say exactly what the SNP is going to do if there is to be independence in Scotland, not only on regiments, but what the shape and format of the defence forces of an independent Scotland would take. I am sure that they would be a lot smaller and a lot more ineffective than what we have now. I doubt whether they would be larger, and I am not sure what their role would be and whether they would be in or out of a NATO command structure.

Anas Sarwar: Will my hon. Friend give way?

Nigel Evans: Order. Before the shadow Minister takes that intervention, may I just point out that this is a time-limited debate and he has been incredibly generous in the interventions he has taken? That is not, however, to stop the intervention he is about to take.

Anas Sarwar: I come back to that important point about the separation of Scotland from the rest of the United Kingdom. Is my hon. Friend aware of comments made by Alex Salmond, Scotland’s First Minister, earlier this year? He called the MOD plans exactly the sort of “configuration you’d want”.

Kevan Jones: That is right, but this point about an independent Scotland is not just about the regiments and the size of the armed forces; it is about all the procurement. I am sorry, but many English shipbuilders will be arguing strongly for contracts to be placed with English yards rather than Scottish yards if Scotland becomes a foreign country. We do not procure warships from foreign Governments.
	The Secretary of State’s statement dealt primarily with the 45% of the budget that is spent on equipment and support. There will be no 1% real-terms rise for the 55% that is spent on other areas of defence, including personnel. We are very concerned that this will result in a real-terms cut to the armed forces personnel budget, particularly given that these costs tend to rise higher than the usual rate of inflation. Not only was the announcement therefore less comprehensive than it was spun to be in the newspapers, but it would appear that the limited investment in equipment budgets is coming at the expense of investment in personnel, who are already suffering under the Government’s cuts to personnel numbers, allowances and pensions. So it is becoming clear to many that the Secretary of State has balanced the budget on the backs of our brave service men and women, and Ministers will have to offer this House the information it needs to take these claims seriously. [Interruption.] The Whip says from a sedentary position that that is a silly thing to say, but I think I might have a little more knowledge of the intricacies of the defence budget than he has.
	On the capital investment side, Ministers have not factored in the costs of the proposals to withdraw British military bases from Germany. They will have a significant short-term cost, which they seem to have conveniently just ignored. I considered that idea when I was a Minister and even four years ago the price tag was some £3 billion. Again, that seems to have been conveniently forgotten in this so-called new balanced budget.
	On top of all that, the Minister has failed to substantiate the figure of £38 billion. I will not reiterate the points I have read out already, but I will add a third example. Mr Jon Thompson, the director of finance at the MOD, told the Public Accounts Committee that Ministers were committed to producing a report in autumn 2011 on the extent of the so-called gap in the budget. We are still waiting. That information is vital because the legitimacy of everything the Government are doing through the defence cuts is predicated on that so-called gap.
	I would be grateful if the Minister could answer a few questions. As the post-2015 1% rise is an “assumption”, could it be revised between now and 2015? What rate of inflation was used to calculate the 1% real terms annual increase in the equipment budget between 2010 and 2020? When will we get the National Audit Office’s assessment of the MOD budget and, more importantly, will the House have an opportunity to debate that report?
	The Secretary of State also needs to factor defence inflation into his calculations. It would be interesting to know what figure he is using for the real-terms cuts to the 55% of the MOD budget that lies outside the equipment and support budget. Members might be aware of reports over the weekend, for example, that an ongoing study of British shipbuilding might result in the delay of one of the new aircraft carriers and the potential closure of Portsmouth dockyard, with a threat to some 3,000 jobs. That casts even greater doubt on the
	Ministers’ claim to have balanced the budget. It is hard to see how they can justify their triumph when such issues remain unresolved. The Minister’s comments on the Portsmouth report would be welcome.
	We now hear announcements from the MOD by leak—either official or unofficial—and an interesting one is on the future of Defence Equipment and Support. The Chief of Defence Matériel is supposed to be pushing forward the Government-owned contractor-operated model. Restructuring is important in defence procurement, as we would all agree, but there are huge questions about the impact on accountability to Parliament of privatising decisions that deal with many millions of pounds of taxpayers’ money.
	As for the carriers, the Government have sought to present themselves as economically competent and the Opposition will resist the temptation to take Ministers at their word. As was mentioned earlier, the costly, unnecessary and humiliating U-turn on the British aircraft carrier capability meant that we ended up with a policy that the Prime Minister had rubbished the year before and that millions of pounds of taxpayers’ money have been wasted at a time when the defence budget is being cut deeply. The Government must come clean and explain in detail how much was squandered by that reckless decision.
	Britain is a proud maritime nation, but as a result of the decisions taken in the SDSR we are left with no maritime surveillance capability and with no carrier strike capability until at least 2017. Huge issues remain unaddressed. The Secretary of State has not decided how many aircraft he will purchase, just as he has deferred his decision on whether a second carrier will be operational. He stated to the House that he would be committed to “continuous carrier availability”, but that might now not be the case.
	With such a backdrop, it is not surprising that morale in our armed forces is low. Morale has been described as in freefall as a result of some of the decisions on redundancies, cuts in allowances and permanent pension reductions. The Forces Pension Society has said that it has
	“never seen a government erode the morale of the Armed Forces so quickly”.
	I hope that right hon. and hon. Members have had the opportunity to look at today’s report on housing by the Select Committee on Defence. It shows that the cuts in expenditure on improvements in forces accommodation are leading to real pressures in Army housing.

Andrew Murrison: The hon. Gentleman mentions pensions and a number of right hon. and hon. Members in the Chamber have a particular interest in service pensions. No doubt they will want to hear whether, if he were returned to office in 2015, he would reverse the changes that have been made.

Kevan Jones: We need to consider armed forces pensions as a whole, which is something else that I considered as a Minister. Many people do not realise that although the armed forces pension scheme is non-contributory, members of the armed forces pay for it through abatement in their increases. As the Government have abandoned the Armed Forces Pay Review Body’s recommendations and our proud record on such recommendations when
	we were in office, it is time to look at how armed forces pensions are dealt with as a whole. Interestingly, when I wanted to look more closely at such issues, the Secretary of State who resisted was Lord Hutton, who is now advising the Government on pensions in general. The issue needs to be considered as a whole—not only pensions but abatement in pay, too.
	In 2010, we were committed to spending £8 billion on accommodation in the next decade, £3 billion of which was for improvements and upgrades. In contrast, this Government have slashed spending on housing by some £41 million. I remember that when I was a Minister and when my right hon. Friend the Member for Coventry North East was Secretary of State, despite our record investment in accommodation, the then Opposition were highly critical of what we were doing. Many in the armed forces will now be dismayed by their actions in government.
	It is also important to listen to the armed forces federations. Dawn McCafferty of the Royal Air Force Families Federation has commented that families felt as though the covenant had already been broken within months of its announcement because of the cuts. Until the fall in morale is acknowledged and acted on, many will question Ministers’ commitment to upholding the military covenant.
	A particular concern for us is the way in which reductions in the number of armed forces personnel are taking place. Two weeks ago, the Minister ordered yet another tranche of redundancies affecting 4,100 personnel, 30% of which were compulsory. It is a great worry that we are losing not only important skills but expertise and capability that we can no longer afford to lose. The public and armed forces community are quite rightly angry that individuals who are ready to deploy to Afghanistan are being given their P45s, despite all the assurances given by the previous Secretary of State and by this one. I know from experience that if we had treated the armed forces in such a way when we were in government, Conservative and Liberal Democrat Members would rightly have pilloried that decision. We feel it is only right to hold them to the same high standard that they put forward when they were in opposition, which they seem to have conveniently forgotten now they are in government.
	Many will be concerned by the rumours that are circulating about the Government’s plans to cut regiments and battalions. Our regiments embody our proud history and the national prestige of our armed forces. Many have served with distinction in the fields of Flanders, on the beaches at Normandy and, more recently, in the deserts of Iraq and Afghanistan. The Secretary of State’s now-trademark lack of sensitivity when dealing with this issue is understandably creating anger among many serving in the armed forces and those who have retired.

Patrick Mercer: May I remind the shadow Minister that his Government cut and disbanded regiments while they were on operations? They also wholesale disbanded historic regiments and invented names from “Alice in Wonderland” for new regiments, so there can be no lessons from the Opposition about the maintenance of historic and honourable regiments. Many of us wear the scars to bear witness to that.

Lindsay Hoyle: Order. We are now on 46 minutes.

Kevan Jones: Don’t worry.

Mr Deputy Speaker: I am worried. It is no use telling me not to worry because Members—I ought to warn them now—may be down to a five-minute limit or less if we are to get them all in. I wanted to let people know so they could alter their speeches.

Kevan Jones: I will take your guidance, Mr Deputy Speaker, and not take any more interventions. On the comments of the hon. Member for Newark (Patrick Mercer), he knows that the recommendations put forward at that time regarding structure and names were put forward by the Army.
	Any uncertainty needs to be clarified. It is almost a month since the Secretary of State told the Royal United Services Institute that some units will inevitably be lost or merged. Given that he has gone outside Parliament to light bonfires of rumours, it is not acceptable for him to throw more petrol on them by delaying. We are told that the Ministry of Defence has signed off on this issue now but that matters are being held up by Downing street for political reasons. That uncertainty is leading to a lot more rumours, which are causing more uncertainty.
	In conclusion, when they were in opposition the Conservatives called for a larger Army, a larger Navy and increased investment in the armed forces. In government, their actions have been to do exactly the opposite. It is not surprising that they are losing the trust of the armed forces community and the public so quickly. We in opposition want to support strong reform on procurement and the principles of the military covenant and we want the equipment programme to be improved. Too often the Government have put austerity before security. I hope that in his response the Minister will not just answer the questions I have put forward but will also agree with the terms of the motion and the recommendations regarding the assumptions of the defence review to give those whom we ask to serve on our behalf, the confidence and certainty they deserve.

Nick Harvey: Let me start as the hon. Member for North Durham (Mr Jones) did—by paying tribute to the men and women of our armed forces. The job they do is difficult, dangerous and sometimes deadly, but they do it with a professionalism, commitment and courage that we have come to expect but should never take for granted. This weekend is armed forces day, which will give all of us the opportunity to pay tribute to the contribution of the entire defence community.
	The House will note that we do not have the pleasure of the company of the shadow Defence Secretary this evening. No criticism attaches to him for going on a defence visit to Australia or for staying on for a few days afterwards. No criticism attaches to him for allowing the Secretary of State to honour a commitment to host Defence Ministers from several of our allies this evening. The only criticism of the shadow Secretary of State is that he has left the poor old hon. Member for North Durham the unenviable task of trying to move this completely nonsensical motion.

Kevan Jones: The Minister is correct that the shadow Secretary of State is in Australia—unfortunately with the hon. Member for Devizes (Claire Perry), but I understand that they did not travel on the same plane so that is one good thing for him. He has stayed on after the defence visit because a member of his family there is seriously ill. That is why he is not here today.

Nick Harvey: I am sure we all wish the family member well. I did say that no criticism attaches to the shadow Secretary for his absence and I mean that most emphatically.
	The matter before us is this nonsensical motion. It seems to say that the Opposition recognise the need to make the changes we are making, but the fact is that they ducked these changes year after year. They went for 12 years without a defence review, with pressure building up in the defence programme all the time, and there was a black hole of whatever size—we will come back to that in a minute—by the time of the strategic defence and security review. They left our armed forces overstretched, under-equipped and underfunded for the tasks they were set. That is the legacy of the Government in which the hon. Member for North Durham served. The blame for the need to remove platforms, reduce manpower and make the other reductions we have had to do sits very squarely at the previous Government’s door. They wrecked the economy, they wrecked the defence budget and they failed to make the changes necessary to prepare our armed forces for the future.
	The hon. Member for North Durham made heavy weather of the black hole. When we began the SDSR process in the summer of 2010 we asked the officials who were presiding over it at the MOD, “What is our baseline and what is the true financial situation as we start this process?” The explanation came that if we took the manpower commitments, all the overheads and all the committed expenditure, including the contracts that had been signed for procurement and those that had been announced by the previous Government as Ministry of Defence policy, and planned to bring them on stream when the Labour party said they would be, over the 10-year period, there was a gap between all that and a “flat real” terms assumption on funding—not a “flat cash” assumption—in relation to the 2010-11 budget. We were told that the gap over the 10-year period would amount to £38 billion. It was a 10-year period because that is the length of time over which the MOD plans its budgets.
	The hon. Member for Bridgend (Mrs Moon) said that that was an unreasonable thing to view as a starting point. She compared it with the situation of someone who was about to go personally bankrupt aspiring to buy a Ferrari, but I do not think that is very kind to the right hon. Member for Coventry North East (Mr Ainsworth). When he came to the Dispatch Box a few weeks before Christmas in 2009, he announced that there would be 22 new Chinook helicopters. He did not sign a contract or find the money to pay for them but he announced there would be 22 new Chinook helicopters. I do not know whether in the fantasy budget of the Labour party it does not think that that was a commitment, but it was one of the commitments that that Defence Secretary made, and it was on that basis that the £38 billion black hole was presented to us by officials.
	I do not call into question the personal commitment of the hon. Member for North Durham, but he has to recognise that his motion opposes everything that this Government are doing and is pretty scant when it comes to proposing any alternatives. He says that he recognises the need for defence reform, but the only response in his motion is to be concerned, “anxious” and “worried” about how we are clearing up the mess he made. He has not presented one properly costed plan or given us a coherent alternative. He has not given us a plan A, let alone a plan B. He needs to recognise that he has to do better if he wants to hold us to account for what we have done.

John Woodcock: Does the Minister think the decision he has just criticised was better or worse than switching to a “cat and trap” system when first coming into office and then reversing that decision at great cost only a year later?

Nick Harvey: I think it was a perfectly sensible alternative to explore the “cat and trap” option. As we said at the time, it would have given us the ability to project a much better aircraft type off the carrier. I think that to commission the detailed work on that proposal was entirely responsible. If it ends up costing us the maximum, as the Secretary of State suggested, of £100 million, that is a small sum compared with the £1.5 billion the previous Government added to the carrier project in one afternoon, when they announced from the Dispatch Box that it was to be postponed by a year. That was a far greater drain on the defence budget than the relatively small bounded study, which unfortunately concluded that the costs of going ahead with the plan were such that it was not viable.
	The shadow Defence Secretary has identified £5 billion of cuts that he says he supports, but that would barely scratch the surface of the black hole that his party’s Government left behind. Of course, his cuts are not new; they are already being made. On Labour’s current public plans, the defence budget would still be in chaos. They have pledged neither to make any extra savings, nor to restore the cuts that have been made. What is interesting is not what they are saying in public, but what they are saying in private. Earlier, reference was made to the interesting correspondence between the Leader of the Opposition and the shadow Defence Secretary. It is worth quoting the letter from the Leader of the Opposition to his colleague, dated 23 January this year:
	“You have powerfully made the case in your recent interventions that there is no easy future for Defence expenditure and clearly in the context of the current fiscal position we can expect to have to make further savings after the next election.”
	In public, the Opposition are against the cuts that we are making, but in secret, they are planning even deeper defence cuts. Today’s debate is not simply opposition, but opportunism as well.

Kevan Jones: We said that at the last general election. What we were not going to do is rush the process. I challenge the Minister of State to place in the Library of the House the details of how he arrived at the £38 billion figure. Today he has said something that no other Minister has ever said: that the £38 billion is over 10 years. The impression has always been given
	that it is there right now. Will he produce that information? Without it, some of the cuts he is making are not credible.

Nick Harvey: That is absolute nonsense. It has been clear from the outset that the £38 billion figure was over 10 years. I remember many a debate with the shadow Defence Secretary about whether we were talking about the 10 years being measured out on the spending side in flat real or in flat cash, and I have said again tonight that it was by reference to flat real. It has always been a 10-year figure, and the suggestion that we have magicked £38 billion out of spending in two years is clearly nonsensical; it has always been over 10 years. I am happy to give the hon. Gentleman further details of how we worked that out, but there is no getting away from the fact that the Labour Government left behind a massive black hole. The right hon. Member for East Renfrewshire (Mr Murphy) has identified a tiny number of cuts that he thinks need to be made and he has secret plans to make more, but he is not prepared to face up the difficult decisions that have to be made to clear up the economic inheritance across the piece and specifically in defence.
	Transforming Britain’s armed forces by implementing the 2010 SDSR is necessary to recover capabilities after a decade of enduring operations. It is necessary to prepare the armed forces for a future in which threats are diverse, evolving and unpredictable. It is necessary to help to tackle the fiscal deficit and to put the defence budget and equipment plan back into balance. We have to build for the future with strict financial discipline, making certain that the armed forces have confidence that projects in the programme are funded and will be delivered. As my right hon. Friend the Secretary of State announced last month, the black hole has now been eliminated and the 10-year defence budget is now in balance. I readily acknowledge that Future Force 2020 will be a smaller fighting force, but it will still be able to deploy a brigade-sized force on a sustained basis on operations, or a divisional-sized force on a best effort.
	There was much criticism from the hon. Member for North Durham because we have had to reduce manpower numbers, but it is worth noting that in the memo the Opposition defence team sent back to the leader of their party, they said, in reference to Royal Navy and Royal Air Force personnel, that they recognised that there would be reductions in personnel numbers. On Army restructuring, too, the memo stated that they recognised the need for manpower reductions. So they recognise the need for the measures we are taking; they just do not like the grim reality of having to do it.
	Despite all the changes that we are making, we will still be supported by the fourth-largest defence budget in the world, meeting our financial responsibilities to NATO. We will configure the armed forces for a world where threats to our homeland and allies are increasingly to be found outside Europe, rather than on the north German plain, and we will move from a heavily armoured force to a more mobile, adaptable and deployable force.

John Baron: My right hon. Friend is right to take no advice from the party that, when in government, more than doubled the
	national debt, but may I pursue the point about recruitment and downsizing the British Army? Reports suggest that 2nd Battalion the Royal Regiment of Fusiliers is to be axed, despite being one of the best recruited battalions in the British Army and forecast to remain so. Does the Minister accept that decisions about which battalions to axe should be based on the ability to recruit? In that case, the Ministry of Defence should be looking at the Scottish battalions, which consistently have trouble recruiting, with their numbers made up by English soldiers. I would suggest that no Englishman should ever be forced to wear a kilt.

Nick Harvey: I urge my hon. Friend and all other hon. Members not to give credence to speculation about which battalions might end up having to be disbanded or merged. I repeat what I said at Defence questions: the decisions will be taken on the most objective criteria, not on a snapshot of current recruitment. Those criteria will be ensuring that we get the right balance of forces for the future, that we maximise our operational output and that we have the right geographical spread across the country, and that our long-term ability to recruit is assured.

Jim McGovern: My grandfather, Hugh Macdonald, served gallantly in the Black Watch and is buried in the military cemetery in Gibraltar, where he died in 1941. I am sure that he was proud to wear a kilt. There were Englishmen serving in the Black Watch then and now—indeed, the Liverpool Scottish part of the Black Watch comes up to Dundee every year. Can the Minister of State give my constituents and serving members of the Black Watch some sort of assurance that, on his watch, there will always be a Black Watch?

Nick Harvey: I can give the hon. Gentleman the assurance I have just given the House: the decisions to be taken will be objective decisions against the four criteria that I have just set out. No one should give in to the temptation to believe what they read in the newspapers.

Pete Wishart: Scotland is suffering badly from what is happening in defence spending. Only four of the 148 major Regular Army units are based in our territory. That represents 2.7% of the entire British Army, yet we have 8.4% of the population. Why is Scotland doing so badly when it comes to defence cuts and defence spending?

Nick Harvey: I do not accept either the analysis or the figures offered by the hon. Gentleman. Scotland does well out of defence, and defence does well out of Scotland. We plan our defences for the defence of the United Kingdom as a whole in the most coherent way we can, and Scotland will do a great deal better out of being part of the UK’s defences than it will ever do if it goes on its own and plans its own defence force.

Bernard Jenkin: There is speculation that the process is being elongated, perhaps over a number of months, because of political considerations. Does my hon. Friend accept what a large number of armed service men and women are saying—that uncertainty is extremely corrosive, damaging and morale sapping, and the sooner these decisions, however difficult and unpleasant they are, can be made, the better?

Nick Harvey: I agree. Uncertainty always has a destabilising effect. I can assure him and the members of the armed forces that they will not have long to wait. However, it is more important that we get this right than that we do it quickly. These decisions are a once-in-a-generation rebalancing of the Army’s structure. If we get it wrong, the Army will suffer the consequences for decades to come, so it is important to take a little time and get it right. The House will not have long to wait for announcements to be made.

Richard Drax: We hear reports that people are being targeted for redundancy and will therefore not qualify for their full pension. Is that correct? If it is, will the Government look kindly on those affected?

Nick Harvey: Let me say first to my hon. Friend that the issue of disbandment of battalions, which we were just discussing, and redundancy have nothing to do with each other, so nobody should read into the decisions that are taken about particular battalions that members of those battalions will be made redundant. In answer to the specific question that he puts, nobody has been selected on the basis of their proximity to a retirement date, but inevitably it is the case that where there are lines, some unfortunate souls will fall just the wrong side of the line. It is a matter of great regret, but the redundancy payments will in any case be bigger than the lump sums that those personnel would have received at retirement.

Andrew Murrison: In making the very difficult decisions that my hon. Friend undoubtedly will have to make in the near future, what attitude does he have to the very gallant men and women from countries other than the United Kingdom who serve in our armed forces? How does he imagine they will be affected by the redundancy programme?

Nick Harvey: In no way will they be singled out. These decisions are being made in the most objective and scientific way we can make them, but inevitably some who serve from overseas will be affected and others will be more fortunate. There is no getting away from that.
	Some of the reductions that are to take place will be accounted for by reduced recruiting and fewer extensions of service, but as I said, a redundancy programme is, sadly, inevitable to ensure that the right balance of skills is maintained across the rank structures. Compulsory redundancy will not apply, as we have made clear from the outset, to those in receipt of the operational allowance, those within six months of deploying, or those on post-operational tour leave following those deployments. In all cases it is for the individual service to determine how the necessary reductions can be achieved and over what timeline, making sure that the right mix of skills, experience and ranks are retained.
	The main programme for the Royal Navy and the RAF have been concluded, but protecting the Army’s contribution to Afghanistan has meant that two further tranches are still to come for the Army. We will, as I said, make an announcement on Army 2020 very shortly, which will provide clarity on the future structure of the Army. We will have a land force of 120,000, composed of a Regular Army of 82,000, plus 30,000 reserves and
	an 8,000 training margin. An Army of this composition will have to be structured differently, and it is impossible to do that without losing and merging some units.
	Although we cannot avoid difficult decisions as the Army gets smaller, we will seek to do this in the most sensitive way possible, respecting the traditions of the Army, respecting the traditions of our great regiments, but always recognising that military effectiveness must be the first requirement in designing our future structure.

Julian Brazier: I commend what my hon. Friend has just said. When we think about which TA regiments to keep, which to lose and where to put them, I urge him to bear in mind that a unit in the Territorial Army cannot be moved more than a very small distance without losing the people. It is even more critical than in the Regular Army to pick those that have an officer and soldier base that is well recruited; many units do not have such a base. It is vital that we build on the best ones.

Nick Harvey: My hon. Friend makes a good point, which is being taken into account as these difficult decisions are made.
	The current financial situation makes it difficult to act as swiftly as we would wish to address some of the issues that make day-to-day life that bit more difficult for personnel and their families. Mention was made of the pause we have had to make on major housing upgrades, but thankfully the £100 million additional investment in accommodation that was announced in the Budget will deliver more than 1,000 new and refurbished single living and service family accommodation units. That will help the MOD to continue to meet its commitment, set out in the armed forces covenant, only to allocate homes that are standard 2 or above.
	On the issue of the covenant, I start by recognising the important work done by the hon. Member for North Durham, along with the right hon. Member for Coventry North East, in preparing the ground for the publication of the tri-service armed forces covenant in May last year, which built on many of the suggestions in their Command Paper. We have been able to double the operational tax-free allowance and we have improved rest and recuperation. Council tax relief has been doubled twice since the Government took office, and now stands at nearly £600 per person for a six-month deployment. In health care, we are investing up to £15 million in prosthetics provision for personnel who have lost limbs during service, extended access to mental health and increased the number of veterans’ mental health nurses.
	On education, we have set up scholarships for bereaved service children, provided financial help for service leavers who want higher and further education, and introduced the pupil premium for the children of those currently serving, making extra funds available for state schools with service children. More than 50 councils have signed up to the community covenant scheme with another 47 planning to do so, and there is a £30 million grant pot to support that. However, there is a long way to go.
	For the first time, the armed forces covenant has been formally published and recognised in legislation, and we are working across Government to ensure that no disadvantage is faced by armed forces personnel, their families and veterans compared with other citizens.
	Every since the publication of the SDSR, the Opposition have been calling for another SDSR. They went 12 years in government without one, but they now seem to want another one every time the wind blows. We have put in place a system for regular strategic review through the National Security Council, and preparations for the SDSR of 2015 are already under way in the MOD. However, none of the strategic assumptions underpinning the 2010 SDSR have significantly changed, so we will press ahead with the implementation of the SDSR based on formidable, adaptable and high-tech armed forces, built on balanced budgets and supported by an effective and efficient MOD, taking the tough decisions that the previous Government ducked, providing our armed forces with the tools they need to do the job we ask of them, upholding the armed forces covenant, and protecting this country’s national security, which is the first and foremost duty of any Government.

Several hon. Members: rose —

Lindsay Hoyle: Order. I will have to bring in a five-minute limit on speeches and I may have to reduce it. If Members are good to each other and do not intervene too often, I hope to get everyone in.

John Woodcock: We got a lot of heat from the Minister, but we are not much clearer on the key issue on which I want to expand—defence procurement. My hon. Friend the Member for North Durham (Mr Jones) and my right hon. Friend the Member for Coventry North East (Mr Ainsworth) have already made excellent points on the issue. It is of course true that any incoming Government at the last election would have had to make savings and the process could have been difficult. The Labour Government put in place the process to consider how we should do that, but the important thing was to learn and see where the next Government could improve. So far, the signs are that this Government have comprehensively failed to do that.
	When the right hon. Member for North Somerset (Dr Fox), who became Defence Secretary, was not making promises in opposition about increasing the size of the Army, he used to tell the House how terrible it was that Ministers increased the costs of projects by delaying them, but in government his party is doing precisely that, with significant added cost to the taxpayer.
	As we have seen again today, Ministers are patting themselves on the back as if they have finally and magically squared the circle on defence procurement. I am afraid that what they have done is simply seek the appearance of order, in the manner of a child tidying his bedroom in great haste. They have done this in a number of ways. Some costs have been swept under the bed, increasing the burden on taxpayers and storing up risk for future years. In that category, of course, I include the successor deterrent.
	Ministers can announce the necessary long-lead items initiated in recent weeks with as much fanfare as they like—they know that I have welcomed the commencement of each one so far—but they know that that is now being done to a tight timetable and with increased costs
	caused by the delay they imposed in bringing the successor into service when they first came into office. When the Defence Secretary boasts about balancing the procurement budget, he knows that that has been made possible only by shifting the project’s cost profile to the right, largely out of this spending round, which is precisely what Conservative Members used to rail against from the Opposition Benches. The extra cost of refuelling the existing Vanguard class submarines alone, which was made necessary by the delay, was estimated at between £1.2 billion and £1.4 billion by the former Secretary of State. We are yet to hear the full cost of this exercise in political management and short-term debt clearing. Perhaps the Minister will seek to enlighten us when he winds up.
	In their desperation to present a false image of order, the Government have gone beyond simply sweeping things out of immediate sight. Some projects have been subjected to the procurement equivalent of being hastily hurled out of the window, with little thought for the waste that that causes or, most importantly, the implications for national security. Any claim they might have made to have got to grips with defence procurement was surely destroyed by the farce over the aircraft carriers, which my hon. Friend the Member for North Durham set out well in his speech.
	The final trick for those worried about their shoddy work being exposed is simply to turn off the lights. The Government have produced no credible evidence today or in the past about where this £38 billion has come from or how it will be filled in future. We are left with a lingering lack of certainty over the cost of big-ticket items and the personnel are bearing the brunt, with the Army that the Government promised to expand possibly set to get another whack. The books are cooked on the assumption of long-term increases in MOD funding post-2015, and black holes, which were never properly described in the first place, are apparently filled. The truth is that Ministers do not have a grip on procurement or cost overruns and have failed to put considered policy and the defence interests of the nation ahead of political posturing.

Menzies Campbell: For the past 40 years, RAF Leuchars in my constituency has been responsible for providing air defence for the northern half of the United Kingdom. It is ideally situated for the purpose, close to centres of population and training areas, and easily able to deal with intrusion by aircraft—formerly Soviet and now Russian—into British airspace. Even as this debate takes place, there are aircraft at Leuchars on standby to provide the quick reaction alert, which is an essential part of our air defence. Even as this debate is taking place, No. 6 Typhoon squadron has been stood up and is fully operational, and No. 1 Typhoon squadron is in the course of being stood up. Even now, preparations are taking place for one of the Royal Air Force’s few remaining air shows, which provides a valuable shop window, and it is able to do that, in particular, because of the accessibility of RAF Leuchars to Scotland’s central belt.
	I have no doubt that a seamless and uninterrupted build-up of the Typhoon force is essential to the security of the United Kingdom. Is it true that Leuchars now has a dedicated Typhoon engine bay? Is it true that
	there is now a dedicated Typhoon ejection-seat facility at Leuchars? Is it true that there is Typhoon-specific survival equipment at Leuchars? Is it true that there are Typhoon-modified power supplies and Typhoo-specific IT systems already in place? It is suggested that the Army might be sent in some form or another to Leuchars, but it has not been possible to identify any capital investment in advance of such a decision.
	We know that the proposal is to transfer to Lossiemouth, but no preparations have been made there for the arrival of Typhoon squadrons, which allows me, I hope, the colloquialism, “Leuchars ain’t broke, why is it necessary to fix it?” The truth is that Leuchars is in the right place at the right time and doing the right job.
	Typhoon aircraft from Leuchars can be over London 12 minutes sooner than Typhoon aircraft flying from Lossiemouth. The Olympics, as the head of MI5 identified only yesterday, will be a severe test of our security, but that test is unlikely to end with the Olympic games, and the capacity to provide air defence throughout the United Kingdom will be an essential feature of our future security.
	I have a profound belief that the original decision to move the Typhoon aircraft from Leuchars to Lossiemouth was based on financial and political considerations, which were put ahead of strategic obligations and of the clear operational advantages provided by Leuchars. The financial case has been substantially undermined by the Army reductions that we have heard about, by the rejection of the building of a super-base at Kirknewton near Edinburgh, by the inability of the Ministry of Defence to obtain the sums originally estimated for the sale of properties such as Redford barracks, also in Edinburgh, and by the additional costs of transferring Typhoons to Lossiemouth and of operating from Lossiemouth once they have been transferred there.
	In my view, there is no question but that the deployment of the Typhoon force should be revisited as part of the ongoing review to which my hon. Friend the Minister referred but a moment or two ago. The original decision was flawed. It will be even more flawed if it is executed in the way that is proposed.

Madeleine Moon: I, like my hon. Friend the Member for North Durham (Mr Jones), look at some of the defence reforms—I use the word “reforms” very loosely—and have to question the decisions that were made, including whether they were in the best interests of the defence and security of the United Kingdom, or in the best interests of the Treasury-driven agenda to cut spending.
	Chief among my concerns is the scrapping of the Nimrod MRA4, which has denied us the ability to protect our nuclear deterrent and offshore oil and gas platforms properly; to gather intelligence of threats developing way beyond our coastline such as in the high north; to respond adequately to offshore emergencies; and to contribute to international efforts against terrorism and piracy.
	The Government assumption that we can do without maritime capability until 2020, with the replacement of the MRA4 not being commissioned prior to 2015 and an average commissioning period of five years, is nonsensical. We lost not just Nimrod, but the individuals
	with the skills that need to be nurtured in the area; and they are not just skills that we need to retain in design, building, flying and the analysis of electronic intelligence data, but skills that we cannot afford to see fleeing the country for work abroad, as is happening now.
	The loss of the Harriers—sold for spare parts, we were told—was based on the short-sighted assumption that we can do without planes to fly from our carriers. Ministers insisted that it was a good deal for the British taxpayer, but as one US rear admiral said:
	“We’re taking advantage of all the money the Brits have spent on them. It’s like we are buying a car with 15,000 miles on it.”
	We are losing our prestige overseas, and we should not underestimate how we have gone from being a respected player on the international stage to being, in many quarters, pitied for what we have lost and can no longer do.
	We have been well accustomed to the problems of defence procurement and the conspiracy of optimism that has led to delayed and expensive procurement decisions, but the Ministry of Defence is in great danger of falling into the same trap with its plans for Future Force 2020. The plan seems simple—rebalancing the armed forces to increase the number of reservists, thereby saving money but gaining the benefits of the skills and experience that reservists can bring. I have to say that there is a shocking naivety in this plan. Members of our armed forces are tough, resilient people who welcome the challenges thrown at them, but I fear that reducing their numbers to 82,000 will mean that we face overstretch, burn-out and a loss of capacity, skills and capability.
	As part of Future Force 2020, a threat is hanging over many regiments, including the Queen’s Dragoon Guards. That is deeply unsettling. I make no pretence about the difficulty of the decision to be made, but the amalgamation of any Welsh regiments will be a bitter pill to swallow, especially given the Prime Minister’s speech in the Welsh Assembly this time last year, when he said:
	“While speaking about the part that Wales has played in our past and present, I want to put on record…here…my gratitude to the brave Welsh regiments. From the trenches of northern France to the mountains of South Korea, they have fought and died in defence of our nation and values. Today, in Afghanistan, they continue to serve with courage and distinction, and I pay tribute to them. For them, and for all the people of Wales, I will always be an advocate of this country and everything that it has to offer.”

Jessica Morden: My hon. Friend makes a very powerful point in reading that quote. She knows just how angry people in Wales are about the uncertainty facing the Queen’s Dragoon Guards. Does she therefore welcome the Welsh Affairs Committee’s decision to carry out an urgent inquiry into this matter, and does she think it important that we get the chance to question Defence Ministers in person?

Madeleine Moon: I certainly do think it is very important that the Welsh Affairs Committee looks into the issue, but it needs particularly to consider the most important part of it—the potential future of all three major Welsh regiments. It is also right that Defence Ministers should be available to answer questions. In Wales, the sons, daughters, brothers, sisters and families of our regiments are deeply distressed at the potential loss of one of the regiments.
	Defence reform risks becoming defence vandalism—destroying trust, reputations, capability, capacity and skills that are urgently needed to protect our country in these uncertain times. We in Wales take this extremely seriously, because we risk losing important regiments that make important contributions to the defence of the UK. It is the equivalent of leaving all the windows and doors in one’s house open to potential burglars and going up to bed. However, it is not a burglar who I fear coming into the house that is the UK; it is a murderer, who will murder us in our beds because we have failed to put in place the protections that we need.

Penny Mordaunt: I draw the House’s attention to my registered interest with the Royal Navy reserve.
	I have mixed views about today’s debate. I am always glad when defence is discussed on the Floor of the House, but it is very important that we build a consensus between all parties on these important issues. When the Defence Committee requests time in this Chamber, it is always keen to have a motion that will not divide the House, and I have always tried to adopt that non-partisan attitude in events and campaigns that I have run for the Royal Navy and Royal Marines—for example, in asking the shadow Secretary of State to co-host last year’s Trafalgar day event with me.
	I therefore approach an Opposition day debate on defence with a heavy heart, but today I have a doubly heavy heart because I have to correct a falsehood that has been running for the past few days, perpetuated by Labour’s spin operation. I do not believe that the shadow Secretary of State or his shadow Ministers would have been involved in this, but I hope that in winding up they will take the time to correct it.
	Portsmouth dockyard is the home of the surface fleet. It has a wonderful natural harbour, which is being dredged to house the new carriers. New power facilities are being built, and moves are afoot to put the vacant historic dockyard to new use so that it ceases to be a drain on the defence budget. The operational stress that the carriers will be under will be considerable, so repair and support services must sit alongside the ships in their home port. There is much activity, much investment and more work for the dockyard’s partners and suppliers, most notably Rolls-Royce in my constituency.
	In the face of all that activity and progress, Labour has spent the past few days telling those who work in the dockyard and their families that it will close. It has not been discussing the BAE review; it has been telling people that the Royal Navy base is toast. That is a new low. Government Members have come to expect Labour policy and its lines to take to be divorced from reality, especially where the economy is concerned, but I had thought, perhaps naively, that defence might warrant a more grown-up attitude. This sort of distortion is indefensible not just because of the unnecessary hurt and worry that is caused to people in my constituency, but because of the damage that it causes to British businesses.
	We have to retain a shipbuilding capability in the UK—it is a sovereign capability. To afford the Royal Navy ships of the future, we need a slower drumbeat in
	our yards in building those ships. We therefore need to export more Royal Navy-designed ships. We also need to make better use of the gaps in work in our yards, rather than put the brakes on contracts, especially those that will deliver much-needed and much-missed capability, such as carrier strike force.
	There is a gap between the carrier work finishing and the building of the new Type 26 combat ship starting. Rather than making the mistakes of the last Government and paying for the work to be delivered slower, we should use that time and money to do something more useful, using designs that we already have. We should build ocean patrol vessels and perhaps an ice ship, which would certainly be of use. That would be a better use of public funds, retain the capability and provide more options either to carry out operations or to generate funds for the Department. We must have no let-up in the Government activity to hook in any buyer who is looking to purchase a combat ship. I know that Ministers are considering all those options.
	These are important issues, but on them, Labour is silent. It does not seem to be remotely interested in ensuring that the Government do the right thing, that we have the capability that we need or that we are getting value for money. Nor has it stated what its view is on the future of shipbuilding in the UK. Instead, over the past few days Labour’s press office has misled people in my constituency by saying that the Navy base will close. The Government could not have been clearer in their statement that all three Navy bases will be retained. The shadow ministerial team know that. I therefore hope that whichever shadow Minister responds to the debate will tell us what they think about shipbuilding in the UK. At the very least, they should state that they know that the Government are committed to the three Royal Navy bases.
	The shadow Ministers should reflect on the actions of their party over the past few days. If Labour wants to have a debate about the BAE Systems review, that is fine. I will show up. In the meantime, I ask that it treats my constituents working in and with the armed forces with a greater degree of respect.

Hugh Bayley: With all the pressure on defence spending in this country and abroad, it is hardly surprising that at the NATO summit in Chicago, smart defence was one of the key items of discussion and NATO pledged to do more with less. I believe that NATO, like the Defence Ministries in its member states, will deliver greater value for money if its expenditure is transparent, subject to independent audit and scrutinised by Parliaments in member states.
	NATO’s external audit function is overseen by the International Board of Auditors for NATO, which consists of six board members who are nominated by the national delegations. The members rotate between the NATO member states, so there is no continuity of oversight. The IBAN board is accountable not to Parliaments, as is the National Audit Office in relation to UK defence expenditure, but to the North Atlantic Council, the executive branch of NATO. The audits are carried out by 22 able members of staff, who are not independent, but are employed by NATO.

Bob Stewart: As an ex-NATO officer, may I point out that the North Atlantic Council can sit in Prime Minister or President form, Foreign Minister form, Defence Minister form or permanent representative form? Governments are therefore represented on the North Atlantic Council, to which IBAN reports.

Hugh Bayley: Governments are represented, but Parliaments are not. The principle in the UK is that the National Audit Office belongs and reports to Parliament. It has reported to Parliament for 150 years on UK defence expenditure, while obviously keeping secret things that must necessarily be kept secret, so there is no reason why we cannot have public reporting of defence expenditure.
	NATO’s international board of auditors audited 49 separate sets of NATO accounts last year. I recently met Tim Banfield, a director of the NAO who is responsible for UK defence audits. He told me that NATO’s financial statements are frequently audited late, sometimes by as much as three years, which is not compliant with decent accounting standards—auditors who are trying to track expenditure cannot find the answers to the questions they need to ask three years after an operation has closed down. I asked a Foreign Office Minister how good the audits are, because they are not published. He told me that of the 49 sets of accounts last year, 14 were qualified by the auditors because of irregularities.
	In addition to the financial audits, five performance audits—value-for-money audits—were carried out last year, but there is little evidence that NATO changes how it works to improve value for money in response to their conclusions. Only one of those 49 sets of accounts has been put into the public domain, according to NATO’s website.
	The failure to publish accounts reduces the pressure on NATO managers to respond to deficiencies when they are revealed by audits, and to improve their performance. I raise this matter with the Minister now because I believe there is a narrow window of opportunity to change things, because the NATO Secretary-General has commissioned the new deputy Secretary-General to review the audit function. I shall share with the House a brief extract from a document provided by the Secretary-General to national delegations, including the UK ambassador to NATO. The Secretary-General said:
	“We must adopt best practices employed by other international organisations. NATO is very unusual in having its own auditing service…Organisations that employ external public-service auditors include UNESCO, WTO, OSCE and the OECD.
	To bring us into line with best practice, I propose the adoption of the same approach, phased in to ensure continuity of work.”
	He goes on to make the point that the only other body that does not have an independent external audit function is the EU, from which some hon. Members would not like to take lessons in that respect.
	The NATO Secretary-General clearly wants change, but the decision will not be made by him; it will be made by the North Atlantic Council. Will the UK representative at the North Atlantic Council, whether our ambassador, one of our Ministers or the Prime Minister, support the change agenda? Will the deputy Secretary-General’s report be shown to the NAO and the supreme audit institutions of other member states, such as the US Government Accountability Office, for comment before it is shown to the North Atlantic Council? Will our ambassador lobby representatives of other member states
	to build a coalition to change the audit function within NATO and to bring the information, apart from that which necessarily must be kept secret for security reasons, into the public domain?
	That information will drive improved value for money within NATO. NATO can hardly urge its member states to deliver more value for money if it does not take a lead by doing so itself.

Mark Lancaster: I declare an interest as a member of the Territorial Army.
	I listened with interest to the hon. Member for North Durham (Mr Jones), who has just left his place. I thought he was a perfectly competent Defence Minister, although not quite as competent as the Under-Secretary of State for Defence, my right hon. Friend the Member for South Leicestershire (Mr Robathan). Having listened carefully to the hon. Gentleman’s remarks, I am clear about several matters being pursued by the Government that he does not support, but, given his acceptance that there is a deficit and that it needs to be addressed, I am less clear about what exactly the Labour party would do to address it. I hope that in her winding-up speech the hon. Member for West Dunbartonshire (Gemma Doyle) will explain to the House exactly what the Labour party would do to deal with the deficit. Without that explanation, I fear that many of its claims will look rather hollow.
	I want to focus on the plan for an integrated Army by 2020. I congratulate General Carter on his review. Frankly, he was handed a poisoned chalice, but he has managed to deliver an optimal military solution from very clear terms of reference. I want to be equally controversial by saying that sometimes arguments in the House about which regiments should be saved leave me slightly cold. I understand the historic significance of many regiments, and it is right that hon. Members should defend those regiments, but ultimately, if I were a senior officer, I would be holding my head in my hands, because, following this review, politicians are now tinkering with it and seeking to influence the decision for reasons based on political grounds, rather than optimal military grounds. It is not beyond the wit of the British Army to save various regimental cap badges, so I think that my hon. Friends should relax—I am sure that these cap badges will be saved. Instead, we must focus on the optimal military solution.
	The integrated Army 2020 proposition, the skeleton of which was unveiled earlier this month at the Royal United Services Institute land warfare conference, is a neat solution to dealing with a period of strategic uncertainty at a time of economic austerity, and inevitably it involves smaller land forces. Indeed, it proposes a reduction in the regular force from 102,000 to 82,000, countered by an increase in the trained reserve forces to about 30,000, with an additional 8,000 under training. It aims to deliver an Army designed to meet the capability, aspirations and commitments of the strategic defence and security review 2010.
	Equally, however, the proposal has to deliver contingent capabilities and meet the requirements of the Government’s “Building Stability Overseas Strategy”, published last year. Although I am confident that General Carter’s proposals provide an optimal military solution for the requirements of the SDSR, some cross-Government
	work is clearly still required to flesh out how this upstream engagement in fragile states will be delivered in order to meet the requirements of the overseas stability strategy. It is here, I believe, that the unique specialist skills that so many members of the reserve forces possess should be utilised. As I understand it, the proposed force structure aims to hold defence capabilities at different levels of readiness based on a balanced mix of reaction and adaptable forces. It is key, however, that to deliver this desired outcome, the Army must be able predictably to integrate its regular and reserve components, with the reserves likely to be required routinely to undertake roles such as providing for the UN battalion in Cyprus, as it has done sporadically in the past.
	At the heart of the plan is a progressive move from a reserve force that provides individual augmentees for current operations to one that delivers a scalable, adaptable response by individuals to formed sub-units. This aspiration would certainly be welcomed by the TA, but will be welcomed by the Regular Army only if the TA can be relied upon to deliver. For the individual reservists, this calls for sustained commitment to regular training attendance and predictable periodic mobilisation. This is undoubtedly an ambitious target, but it can be achieved. It is important to realise, however, that there must be not only the military will to achieve it but significant political will and leadership, if the structure and reliance on reserves is to work.

Bob Stewart: There is one other requirement: money for the reserves to train properly. Otherwise, they cannot attain the same level as the regular forces.

Mark Lancaster: I agree. Indeed, I would argue that ambition without funding is simply hallucination, which is why I am delighted that £1.2 billion has been allocated for this upskilling of the reserves.
	I have two concerns about the upskilling, however. First, I want to add to the comment from my hon. Friend the Member for Canterbury (Mr Brazier). When it comes to the reserve units, we must be careful, because a larger TA might actually result in a smaller footprint. We must be careful about which TA units we close, simply because, as I know from my experience as an officer commanding a squadron, we cannot simply move personnel and expect them to move units and travel some 20 miles to continue training.
	Equally, I am convinced that there must be a compulsion to train. At the moment, we simply have a gentlemen’s agreement to turn up and train with the TA. Without that compulsion, I fear that the reserves cannot fulfil the commitment that they are being asked to make. We are fortunate that section 22 in part III of the Reserve Forces Act 1996 already allows for compulsory training, but we need to look carefully at how to implement it, so that we do not end up offending employers, who might then not wish to allow their reservists to go and train. It is a very difficult circle to square. Equally, we need to look at TA regulations to ensure that bounty, a tax-free payment for people who are fit for role, can be adjusted to ensure that such compulsion can be taken into account.
	In my last 27 seconds, I would like to highlight to hon. Members that tomorrow is “wear your uniform to work” day, which is a celebration of our reserve forces,
	with some 1,900 of them currently being mobilised in support of the Olympics and some 700 on operations in Afghanistan. I hope that hon. Members will join me in celebrating their reservists, although they do not have to go as far as I will by wearing my uniform tomorrow.

Diana Johnson: This is the first opportunity I have found in the parliamentary calendar to make any remarks about the Government’s defence procurement White Paper, which came out in February. Unfortunately, it was issued as a written ministerial statement, so there was no opportunity for debate. I do think it is worth looking at what that defence procurement White Paper says. On a number of occasions, I have raised with Ministers my concerns, which arose out of spending the last nine months, along with many trade unionists, employees and family members, fighting for workers at BAE Systems in Brough, who are facing 800 or 900 redundancies.
	We have heard a lot this evening about being in economic difficulties and about the deficit that we need to get down, and it seems to me that defence procurement provides potential not only for growth but for defence exports. I think the Government are missing a trick in this area. My understanding of the White Paper is that the Government are moving towards open procurement, buying off the shelf and getting good value for money, that there is no preferential treatment for British industry or British manufacturers and that they will protect the operational advantage and freedom of action of this country only where it is essential to national security. As I said, the economy is flatlining and we are in a double-dip recession, but we know that countries that invest in, and buy from, their own home-grown defence industries do the best at exporting around the world. That makes sense: if a Government are willing to buy from their own industry, it shows a commitment to, and a belief in, providing the very best. That is absolutely what we want for our armed forces.
	Brough is the home of the Hawk, and when the Red Arrows go around the country and the world flying the Hawk, people know that it is an excellent, British-manufactured plane. The Red Arrows display amazing acrobatic aeronautical feats, showing again Britain’s excellence in manufacturing. My real concern, then, is about the Ministry of Defence’s approach to future procurement, as it seems to treat itself as if it were a private company, just looking for best value and not recognising that it is part of the Government as a whole. The Government have a commitment—the Opposition support them in this—to growth and rebalancing the economy.
	An interesting piece of work has been done on “The Destinations of the Defence Pound”. It is a RUSI—Royal United Services Institute—pamphlet written by Trevor Taylor and John Louth. They point out that buying off the shelf has a negative effect on Government revenues so it does not help the country to deal with the public sector deficit. Buying British, on the other hand, will ensure that British taxes are paid during the course of the procurement process, and there is likely to be a British supply chain, too. The pamphlet shows that spending £1 million will lead to a 36% return to the Exchequer via tax, national insurance and other means. It does not go into the wider benefits, which would obviously include
	jobs—a key issue for the Government and the Opposition at this time. Then there are all the other multiplier effects of buying from the home defence industry. If the Government buy abroad, that money—those taxes—will go to another Government, and will be lost to us.
	It would be helpful if the Minister said something about the European procurement defence directive, and about the need for us to monitor carefully what other countries are doing. Why does the United States of America, when it purchases defence items, demand that they be produced in the United States, and why, in most cases, is any company applying to that market required to have a United States partner even to get a hearing?
	I should like the Government to hold a proper debate on procurement, because I think that it might give them an opportunity to get themselves out of the economic difficulties into which they have got themselves since May 2010. Given that we are now in a double-dip recession, such a debate might be of help to them.

Christopher Pincher: In the light of your injunction, Mr Deputy Speaker, I shall shorten what I was going to say, and speed up what I am going to say, in order to stay well within the time limit.
	It is a pleasure to speak in the debate, occurring as it does on the 150th anniversary of the first investiture of the Victoria Cross in Hyde park. My constituent Samuel Parkes—a long-dead constituent, I should add—was the first private soldier to receive the Victoria Cross, so the debate has extra significance and resonance for my constituents.
	I was pleased and privileged to serve on the Committee that considered the Armed Forces Bill, which became the Armed Forces Act 2011 and which enshrined the armed forces covenant in law. Although it is fair to say that the Opposition were broadly supportive of the implementation of the covenant, it is also pertinent to point out that it was implemented within a year of the coalition Government’s inheriting a parlous economic state. The hon. Member for West Dunbartonshire (Gemma Doyle) was involved in the Committee stage of the Bill. It is clear that the Opposition, although they played their part in the covenant’s implementation, had 13 years in which to introduce a covenant themselves. They had the time, the money and the majority to introduce one, yet they failed to do so. I am pleased that they appear to be supporting what we achieved tonight.
	We in Tamworth recruit heavily to the 3rd Battalion The Mercian Regiment, the former Staffordshire Regiment. Housing is one of the biggest issues raised by my constituents who are in the forces, and by their families. Given the strides that we have already made in improving housing, I hope that, as the Strachan report is implemented and as we proceed with the covenant and report on it, we will do three further things.
	I hope that we will increase the accommodation allowances that are available to our servicemen and women, and will expand the pilot shared equity scheme that was introduced by the last Government. I know that the Minister for Housing and Local Government, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), has announced that £400 million will be spent on helping 10,000 families with the Firstbuy scheme.
	I also hope that we will help more armed forces families to get on to the property ladder. I hope that we will do something that will cost my right hon. Friend the Secretary of State nothing, and prevail on the Chancellor to prevail on the banks to offer more forces-friendly mortgages to help servicemen and women and their families to secure a fixed address, a stable home, and a foot on that property ladder. If we send people abroad to fight for us, it seems only right and proper that we should help them to get a decent home, at home. Such action would also help to reduce the £285 million a year that it costs to service 50,000 homes for forces personnel, some of which is sub-standard.
	The motion suggests that the Opposition still want to make the armed forces covenant very prescriptive. That flies in the face of the messages that we receive from the service chiefs and from the armed forces families’ representatives, who have said that they want a much more flexible and current armed forces covenant that can respond to the current concerns of our armed forces.
	I conclude by quoting Bryn Parry, founder of Help for Heroes. He said in the Armed Forces Bill Committee just 12 months or so ago:
	“I have never seen something written down or the principles of something discussed or made into law work as well as somebody who gets up and says, ‘Right, this is what I want to happen. Let’s make it go.’”––[Official Report, Armed Forces Public Bill Committee, 10 February 2011; Q336.]
	That sums up what the armed forces covenant should be: a flexible arrangement and a current arrangement—and I trust my right hon. Friend the Minister will make it go.

Elfyn Llwyd: Members may know of my concerns regarding the number of military personnel who end up in trouble after leaving the services, and sometimes end up on the street. The Welsh Affairs Committee is currently taking evidence on that, as well as on the regiments question.
	Wales has traditionally provided more than our share of military personnel. It makes sense that returning Welsh veterans—and, indeed, returning English and Scottish veterans—should be treated as close to their families as possible and should have their fair share of resources from charities and the UK Government, to help them recover from their injuries. Having seen how the US treats its veterans, I am sure there are lessons we can still learn. Some of the earlier comments on the covenant are most welcome, however.
	Certainly one lesson we can learn is the importance of ensuring that former members of the armed forces do not feel that they are left behind when they are discharged from the services. The cuts that have happened, and those that are currently taking place, must take into account the need for support networks to be in place for them.
	In Wales, there is a great deal of concern about proposals to merge or disband Welsh regiments such as the 1st The Queen’s Dragoon Guards, also known as the Welsh cavalry, and The Royal Welsh, which includes battalions from the Royal Welch Fusiliers and the Royal Welsh Regiment—it was only recently put together, and one would have thought it would have stayed in place for a while.
	The reduction in the number of Welsh regiments to three has already left a bitter taste, and further cuts will lead to a feeling that Welsh regiments are not being recognised and appreciated for their effort and dedication. Successive generations have joined the Queen’s Dragoon Guards and fought with pride, honour and determination. Some argue that this is due to the method of recruitment, with cultural ties and local knowledge being part of both recruitment and loyalty. New recruits should have the opportunity to choose an armoured regiment or infantry regiment in which they will feel comfortable and safe in the company of their peers while facing potentially dangerous circumstances. However, despite the Queen’s Dragoon Guards carrying out more operational tours in the past 20 years than any other armoured regiment, it is under threat of amalgamation. That is in spite of its being the only remaining Welsh armoured regiment. If these decisions are made, on the order of precedence under the Ironside/Levy rules, both the Queen’s Dragoon Guards and the Royal Scots Dragoon Guards will be maintained.
	There are six objective criteria to be met in this regard: recruitment strength, or the number and quality of those who wish to join; regional or national identity; proportionality to all parts of the UK—we are not looking for favours; the right geographical spread, as the Minister who opened the debate said; capabilities; and operational output. I believe that, on these criteria, the case has been made for maintaining these important and historically significant Welsh regiments.
	On Trident, last week the Government announced £1.1 billion of investment in infrastructure that will make the next generation of Trident missiles. Although the main gate decision will not be made until after the next general election, by investing so heavily, they are, in effect, pushing us towards the decision, so that, as with the aircraft carriers, it becomes a fait accompli.
	This has been done without a proper discussion or a debate on the Floor of the House. Opponents of Trident object for a variety of reasons: some because they are pacifists, others because they do not believe that it represents good value for money or a meaningful deterrent. Large numbers of young men and women are being made redundant from the conventional armed forces over the coming years, and regiments will be lost, but there is enough money for these weapons.
	However, in Wales Labour First Minister Carwyn Jones, apparently wants these nuclear weapons based near the major international trade port that deals with 30% of UK gas and 25% of UK oil and petrol. The oil refinery was the reason why Polaris was not sited at Milford Haven in 1963, and it is unclear why a busier location would be considered today. According to Chalmers and Walker in 2002,
	“it remains the case that refineries would have to close if submarines were relocated there.”
	Therefore, this man is arguing for Trident to come to Wales, for weapons of mass destruction to be sited on Welsh soil and for there to be a net loss of jobs for Wales—not, I think, a very good deal.

Lindsay Hoyle: Order. I am introducing a four-minute limit. I call Neil Carmichael.

Neil Carmichael: It is a great honour to contribute to this debate. I begin by paying tribute to all members of the armed forces for the fantastic work they do. I attended the trooping of the colour and I noted that many had recently returned from the line of fire and were still performing absolutely magnificently. That is emblematic of our armed forces, and we should always remember them and salute them for that.
	I want to make a general point about returning soldiers from Germany, because clearly that is happening; in my constituency there are several who are in need of support from organisations such as Family Lives. It is important to recognise that such major transitions do take place.
	On the black hole that we were discussing previously, I want to make clear what I think a black hole is: a great expenditure commitment over a long period for which there is no money. That was the situation under the last Labour Government, and there definitely was a £38 billion black hole. It has now effectively been filled in and concreted over by our Government, but a black hole is what I have just said it is.
	The motion also refers to the possibility of changing the assumptions on which the strategic defence and security review are based. In fact, many of the assumptions the Government made two years ago were absolutely right and stand the test of time; but obviously, there are nuances that one must bear in mind and adjustments one must make.
	The interesting move that the United States has made in refocusing its efforts towards the Pacific and Asia is a fascinating one that we as a country should be mindful of in having a flexible approach to our naval forces. I noted that, while dealing with Libya, we did not actually need an aircraft carrier. Because we had sensible relationships with allies, we were able to accomplish quite magnificent feats with our fixed-wing aircraft. We have to remember that the advantage of having good allies—an assumption that we made as part of the SDSR process—is absolutely critical.
	We should also celebrate the Government’s creation of a National Security Council, which brings together foreign affairs, international development and defence. Without an appreciation of our foreign affairs objectives, we will not be very successful at putting together a defence strategy. This Government have understood the direct and obvious link between those areas, which is why we are so much better at calibrating, assessing and understanding our defence needs.
	Clearly, we need hardware, and one good thing we are introducing is heavy-lift capacity, which we do need. It is great that Airbus, in the form of the A400M, is part of that package—an aircraft that is doing extraordinarily well elsewhere. The quality of our surface fleet is also an important issue—new frigates and destroyers that are up to the necessary standard for the tasks that we have.
	On aircraft carriers, it was absolutely right to look at what is happening with the new Gerald R. Ford-class carrier in the United States, which has the electronic “cat and trap” system. It must have been tantalising for us to consider, certainly given our relationship with the French and their one aircraft carrier, which is also cat and trap. We did not go down that route, but it was sensible to consider it, because we have to make the right decisions in the long run.

Yasmin Qureshi: I wish to start by talking about the young men and women who serve in our front-line services. I pay tribute to all members of the armed services, be they in the back room or on the front line, but special consideration has to be given to those on the front line, such as those in Afghanistan and Iraq. I went to Afghanistan in 2007 and met some of the young men who were fighting for us. They were 18, 19, 20, and they were being faced by and had to see all sorts of cruelties. They had to face so much hurt and they had to see so many injuries among their comrades. When they come back, we need to look after their physical and psychological needs. That means that if they have been injured in combat, all the best treatment should be made available to them. Even if they have not suffered any physical harm, they must be treated in respect of their emotional and psychological needs as well. They must be supported appropriately when they leave the Army and come into civilian life. That means that if they want to go to university, they should be given free tuition. Although we rightly always pay respect to our fallen heroes, we forget that what people are exposed to in war and in battles is an experience that nobody else is ever going to see and hear. So we should spend a lot more money on looking after our armed personnel who have served on the front line when they come back.
	It is also important to equip these people properly when they are on the front line. They should be properly trained, and the armour, the helicopters and everything else that is required for them to do their job properly should be in place. That also means that the right amount of personnel should be there; 100 people should not be sent to do a job that requires 300 soldiers to do it. That means that the Government should reconsider the abandoning of certain regiments. The fighting force, the infantry and the regiments that go out to fight should not be reduced. One of my constituents who served in the Yorkshire Regiment, which was founded by the Duke of Wellington, says that it is one of the best regiments and has received many Victoria Crosses for the services it has rendered to the country, so I ask Ministers to reconsider reducing the number of soldiers on the front line.
	We are told that some of these re-evaluations of our defence expenditure are to do with the money. I want the Minister, and indeed Labour Members, to consider whether we really need Trident. I know that people think that this is a debate of the left, but everyone knows that four years ago a number of generals and senior people in the Army and the Air Force said that Trident is actually irrelevant and is no longer required, as a result of the end of the cold war. They have also said that it is not ready to deal with the current levels of international terrorism. The generals set that out in a letter to The Times in January 2009. I have copies of the documents where they have asked that more money be spent on conventional forces, which we require to deal with the imminent threats we face. As I said, those people are not pacifists and they are not people who do not know what they are talking about; they are—

Mr Speaker: We are extremely grateful to the hon. Lady for her contribution. I call Oliver Colvile.

Oliver Colvile: Thank you very much for calling me in this debate, Mr Speaker.
	I agree with the comments that my hon. Friend the Minister for the Armed Forces made about how important this weekend is going to be, as it is national armed forces weekend. Not unnaturally, I am delighted to have this opportunity, because my constituency of Plymouth, Sutton and Devonport, more affectionately known as “Guz”, is going to be the national focus for the armed forces weekend. Plymouth is the home of 3 Commando Brigade, the Royal Marines and flag officer sea training, and it has an enormously big heritage, of which we are incredibly proud. I pay tribute to Commander Crichton for all his hard work in putting together the national armed forces weekend.
	During this debate we have heard a great deal about how we need to make an assessment of where we are going. In my submission to the strategic defence and security review, I made it clear that Britain is a maritime nation, and we need to protect our sea routes. That means that we have to ensure that we are not sea blind. The Royal Navy’s role is to ensure not only soft diplomacy but that we can engage as and when Parliament decides where to go. It is a tool of foreign policy; indeed, some people would say that it could be a provisional tool in foreign policy, too.
	I welcome the building of the aircraft carriers, but we need to ensure that when we move on to the next tranche of the SDSR we look long and hard at how to ensure that the supporting frigates are included.
	Plymouth has a good story to tell about its harbour, which is the finest natural harbour in the world. It sits on the western approaches and is the one place in the United Kingdom that can deliver the refuelling and refitting of our nuclear submarines. That is our stake in the ground. I believe it is important that we retain our nuclear deterrent, because it is important not only strategically for our country but for my local economy, as 25,000 people are dependent on the defence industry.
	Our dockyard was consistently under threat for the time that the Labour party was in power and I am delighted by the hard work my right hon. and hon. Friends on the Treasury Bench have been able to do in government to ensure that we can secure its future. The Government have been successful in ensuring not only that we will retain our Type 23s but that the £350 million refit of HMS Vengeance will take place in Devonport. The Government have been rebuilding confidence in Plymouth and Devonport, ensuring that we can do the very important job of engineering research, too, and making us one of the global leaders in maritime activity.
	I am surprised by the Labour party’s approach and ask them to reconsider it. We need to ensure that those involved in our armed services have support in education, that they have decent housing and that they have provision to deal with mental health issues. We must work hard on that. This has been an important debate and we must ensure that we continue with the armed services covenant. I will welcome the opportunity to listen to the next debate on the subject, which will be important.

Steve Rotheram: Britain has a proud military history and throughout that history, sailors, soldiers and airmen served our country with a courage and bravery that has become synonymous with the British armed forces. It is a pleasure to place on the record tonight my appreciation for our armed forces, as I will when I attend a ceremony in Liverpool town hall on Saturday. I will be remembering the eight brave men from Liverpool who made the ultimate sacrifice in Afghanistan, but of course the deaths of those brave men do not tell the full story. Countless others from the Merseyside area have been killed or injured in the line of duty during other conflicts and it should be recognised that Liverpool produces more men and women in our armed forces per capita than probably any other area of the country. As people will know, the Mersey is the lifeblood of our great city and Liverpool has a long history with the Royal Navy and the merchant navy. Its maritime history is a reminder to us all of the sacrifices and bravery of our ancestors.
	In the somewhat limited time I have left, I want to talk about the lack of consideration that this Government have recently shown to our armed forces. I am primarily referring to the widespread reports that the Defence Secretary is to make soldiers who are currently serving redundant on their return from their tour of duty. What kind of Government would do that to their own brave soldiers? Decisions taken today, matters of life or death, spending commitments and diplomatic negotiations can and invariably will have ramifications for generations to come. What is more, some of the policy decisions made by the Defence Secretary today are likely to take decades to become manifest.
	Yes, we need reform—that is why my right hon. Friend the shadow Defence Secretary outlined £5 billion-worth of reforms recently—but a reduction in Britain’s capability based on opinion polls is irresponsible. Controversy is not an excuse for carelessness or, dare I say, callousness.
	The Defence Secretary should not underestimate the part that morale plays when it comes to our soldiers and armed forces. He would do well to remember the words of Dwight D. Eisenhower:
	“The best morale exists when you never hear the word mentioned. When you hear a lot of talk about it, it’s usually lousy.”
	Our armed forces deserve a Defence Secretary who understands defence and does not use it for political expedience. Our British armed forces deserve a Secretary of State who demonstrates compassion for the mission, empathy for the families and a determination to stand up for defence in Parliament.

Gemma Doyle: It has been a pleasure to listen to this evening’s debate on defence reform, in which hon. Members have spoken on a number of topics. Let me say at the outset that the right hon. and learned Member for North East Fife (Sir Menzies Campbell) posed some very pertinent questions to Government Front Benchers.
	I am pleased that we are having this debate in the week before armed forces day because it gives us the opportunity to pause and reflect on the bravery of our forces and the sacrifices they make, as has been mentioned
	by my hon. Friends the Members for Bolton South East (Yasmin Qureshi) and for Liverpool, Walton (Steve Rotheram) among others. Our forces do what is asked of them without question or hesitation and they often place their lives on the line to protect others. I am sure that the national event taking place in Plymouth this Saturday will be a great success. In West Dunbartonshire we celebrated armed forces day on Sunday past with a march-past in Dumbarton high street and a service in Riverside parish church.
	There is no doubt that the armed forces will face challenges in the coming years, not least as part of the new employment model and the Future Force 2020 plan. Some 30,000 troops will have been removed by 2020. That will have an enormous impact on the UK’s capability, and clarity from Ministers on the decisions they have taken about future capability would be welcome. My hon. Friend the Member for Bridgend (Mrs Moon) made some excellent points about our maritime capability.
	Recent reports have raised concerns that certain regiments are at risk of being scrapped. Belonging to a regiment is a very strong part of many soldiers’ identity. That is why the shadow Secretary of State launched our “Respect Our Regiments” campaign last month. I know that many Members are concerned about regiments and battalions being scrapped, including colleagues from Wales, Yorkshire, Scotland and Staffordshire. I apologise if I have missed anyone out. The Government intend to rely much more heavily on reservists in future, and the Minister knows I am concerned that he and the Government plan to scrap employment protections for reservists while asking for more from them.

Andrew Robathan: indicated dissent.

Gemma Doyle: The Minister shakes his head but I raised this with him last year and again last week. I know he is going to write to me and I await that letter because our understanding of the situation differs.
	Last year, we reached agreement across the House on the armed forces covenant. I will resist the temptation raised by the contribution of the hon. Member for Tamworth (Christopher Pincher). As he knows and as the record shows, his party and the Minister had to be dragged kicking and screaming into putting the provisions we now have in law into the Armed Forces Act 2011. Anyone can read the record of the Committee proceedings to see that that is correct. The hon. Gentleman’s recollection was frankly a little wobbly. The Minister knows that I do not think the armed forces covenant is yet being taken seriously enough across all of government and the public sector in accordance with the principles set down. I do not doubt his commitment but more work needs to be done to make sure that it is a reality and that it works in practice.
	I want to raise the issue of discrimination towards our forces. This concern is highlighted in the recent report by Lord Ashcroft, “The Armed Forces and Society”, which states that one in five members of the forces reports have been refused service in a bar or hotel while wearing their uniform and that around the same number reports being verbally abused while wearing their uniform. That is clearly unacceptable discrimination and if we take the covenant seriously we should be looking at how to tackle such behaviour.

James Gray: Will the hon. Lady give way?

Gemma Doyle: I am afraid that I really do not think I have time, but if I have time later I will.
	The service community can face indirect discrimination, creating difficulty with day-to-day matters that we take for granted such as getting credit, mortgages or even a mobile phone contract because they have moved around so often. We should not accept that as inevitable. The principles of the armed forces covenant should apply throughout society, and where those principles are routinely or blatantly breached, it may be necessary to consider introducing measures to deal with the matter. Routine disadvantage or discrimination should never go hand in hand with serving one’s country.

James Gray: The hon. Lady claims credit for having forced the Government to bring the covenant into law. Perhaps she can remind me of any step taken by any Labour Government in 13 years to bring the armed forces covenant into law?

Gemma Doyle: Great strides were made under the previous Government through the Green Paper and the service personnel Command Paper, which set up the provisions we now have.
	Legal protections are in place for other groups in society and we believe that consideration should be given to whether they should be extended to our armed forces. I thought the Minister agreed to cross-party talks in our Westminster Hall debate last week, but that does not appear to be what is on the record. I hope that he is willing to take part in such talks and I would welcome confirmation of that today.
	When referring to the wider service community, we must of course mention forces’ families. They put up with an awful lot and we do not do enough for them. We have to make many improvements, particularly in housing, on which the hon. Member for Tamworth made some welcome comments. The Minister has side-stepped concerns about the missing £41 million for forces’ housing, so I urge him to take cognisance of today’s report from the Select Committee on Defence, which sets out the concerns about housing very well. In last week’s Westminster Hall debate, I urged him to think carefully before making any changes to the rules on service accommodation. As he knows, leaked plans to change the entitlement to married quarters were not well received earlier this year. Perhaps he will tell us tonight whether those changes are still being considered.
	Our motion makes specific reference to pensions. There are concerns that some individuals have been made redundant with only a few weeks to go before being entitled to a full pension. It has been suggested that that was done deliberately to cut cost. The Minister has the opportunity to say today that that is not the case and that getting rid of people from the forces before they qualified for a full pension was not a deliberate policy. Will he also comment on media reports last week that the Government may be considering raising by five years the age at which forces personnel can receive a full pension?
	Many Members, including my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), have highlighted the importance of the defence industry in the UK. That includes a range of industries—shipbuilding,
	manufacturing, maintenance, aerospace, technical support, clothing and optics. Let me say to the hon. Member for Portsmouth North (Penny Mordaunt), who raised some specific issues, that reports about Portsmouth dockyard have appeared in the media and the shadow Defence team has responded to those reports. I assure her that we share her concerns and we are on the side of her constituents and the people of Portsmouth. My hon. Friend the Member for Barrow and Furness (John Woodcock) made some excellent points about defence procurement and in particular about the successor deterrent programme.
	The hon. Member for Milton Keynes North (Mark Lancaster) asked us to explain some of the savings that we have identified. He will be pleased to hear that details of a full £5 billion have been published on The Guardian website, if nowhere else, and I refer him to that site.
	I want to say a little about defence in Scotland. This week saw the launch of the “Better Together” campaign—Scotland’s cross-party campaign making the positive case for staying part of the UK. It is a shame that the nationalist spokesperson for defence has chosen not to be present tonight. For more than 300 years, service men and women from Scotland have served alongside their countrymen and women from the rest of the UK, with a shared identity and goal—protecting the people of the UK and defending those unable to defend themselves around the world. The defence sector is extremely important across the whole of Scotland, supporting around 50,000 jobs and in the west of Scotland pumping about £270 million a year into the local economy.
	On the “Better Together” website, Members can hear Craig and Tanya, both from Dumbarton, and Robert from Cumbernauld, who all work in the shipyards on the Clyde, talking about why they want to stay part of the UK. If any Members are in any doubt about the importance of MOD contracts to the people of Scotland, I suggest they listen to those whose jobs depend on them. Although breaking Scotland off from the UK is a reform too far for me and for the majority of Scots, we have had a good debate this evening on many aspects of defence reform.

Andrew Robathan: May I say what a pleasure it is to agree with the hon. Member for West Dunbartonshire (Gemma Doyle) in rejecting any idea that Scotland would be better off independent, and how much stronger we are—both Scotland and the United Kingdom as a whole—as a Union?
	Many of the contributions to the debate today show how wide and how deep the admiration and respect for our armed forces runs in the House, and that reflects the feelings across the country. We should not forget that the purpose of our armed forces is to succeed on operations, to protect our national security and to provide the ultimate guarantee of our country’s security and independence, as well as helping to project its values and interests abroad. In Afghanistan today, that is what our soldiers are doing, risking life and limb to keep us safe as we sit in comfort in Westminster.
	Operations remain the No. 1 priority for the Ministry of Defence and we will do everything we can to achieve success not just in Afghanistan, but in standing operations
	around the world and in helping to deliver a safe and secure Olympics this summer. But to make sure that this success continues into the future, we have to make sure that our services are structured properly, that the equipment programme is funded and that the needs of our forces are looked after.
	That is why the programme of implementing the SDSR is so necessary—putting the years of Labour mismanagement behind and sorting out the mess. Although it appears that the Opposition recognise the need for change, they still do not appear to understand why there is such a need for change. The shadow Secretary of State for Defence—I am sorry he is not here—has written:
	“In beginning to develop future policy we have to be honest about the past.”
	Today, not one Member on the Opposition Benches has been honest about the mistakes that the Opposition made in the past. Not one has said sorry—sorry for 12 years without a defence review, sorry for the £38 billion black hole in the budget—[Interruption.] The hon. Member for North Durham (Mr Jones) should stop digging. He has been digging quite enough today. Not one Opposition Member has said sorry for ducking the tough choice required to put our armed forces back on track.
	I am afraid that in the limited time available I will not be able to address all the contributions to the debate. The right hon. and learned Member for North East Fife (Sir Menzies Campbell) yet again made an impassioned case for RAF Leuchars. It remains our intention that the Army move to Leuchars and the RAF move to Lossiemouth. He asked some very detailed questions. Will he please take those up and I will make sure that my excellent civil servants in the Box bring them to the attention of the Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), who would be better at answering than I would be this evening?

Menzies Campbell: The questions were rhetorical. The answer is yes in every case.

Andrew Robathan: In which case I do not think my hon. Friend the Minister will be writing to the right hon. and learned Gentleman.
	The hon. Member for Bridgend (Mrs Moon) made a point about the Nimrod MRA4. It was a procurement disaster. The aircraft were never in service and never flew in service. I say to the hon. Lady and to the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) that the Government value the Welsh regiments that she spoke about. I have Welsh antecedents. I had a great uncle killed in Gallipoli in the Welsh Regiment and other relatives in the Welsh regiments, so I can assure her that we value the Welsh regiments. I do not know what is in the report. We must wait until General Carter’s report is published, which it will be, shortly.
	My hon. Friend the Member for Portsmouth North (Penny Mordaunt) drew attention to misleading statements on the naval base that she attributed to the Labour press office. If that is the case, it is regrettable. We have no intention whatsoever of closing the Portsmouth naval base.
	The hon. Member for York Central (Hugh Bayley) raised an important point about audit, accountability and the need for the reform of NATO. I suggest that he takes that up—I am looking again at my excellent civil servants—with the Under-Secretary of State for Defence, my hon. Friend the Member for Aldershot (Mr Howarth), who is responsible for such matters, and I am sure that he will get back to him on that.
	I thank my hon. Friend the Member for Milton Keynes North (Mark Lancaster) for his sensible look at defence strategy and the future of the reserves. I am sure that we are looking forward to seeing him in uniform tomorrow as a serving officer. The hon. Member for Kingston upon Hull North (Diana Johnson) was keen to encourage the defence industry and exports. Three Defence Ministers spend their time going around areas trying to encourage defence exports. My right hon. Friend the Prime Minister was widely criticised, including by Labour Front-Bench spokesmen, when he tried to encourage exports to the middle east. I am very glad to have the hon. Lady’s support. She referred to the economic difficulties that the Government have got themselves into since 2010. I do not think so. I really do not think so.
	My hon. Friend the Member for Tamworth (Christopher Pincher) made a good point about housing. We are working on banks and mortgages, as he asked, and BFPO addresses will now be accepted as proper addresses for security. I am very much looking forward to seeing my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) on armed forces day in Plymouth this weekend.
	I must tell the hon. Member for Liverpool, Walton (Steve Rotheram) that we are not making reductions in the armed forces out of callousness, but with huge regret, and it is painful to us. We are doing it because of the appalling financial situation that the Government received when they took office in 2010.
	The hon. Member for West Dunbartonshire (Gemma Doyle) is not correct that there is any intention to reduce protection for employment of reservists deployed. I am delighted to hear her praying in aid again my noble Friend Lord Ashcroft. I have never heard praise from the Labour Benches for Lord Ashcroft before, but I am pleased to hear it now. Perhaps she will bring forward an analysis of discrimination. I draw her attention to a letter that has been sent to the shadow Defence Secretary from my right hon. Friend the Secretary of State, which says:
	“I welcome the work conducted by Lord Ashcroft…I was reassured that that public support for our Armed Forces remains ‘very high’”.
	He particularly says:
	“I would welcome a discussion with you on how we can ensure that everything we do in Parliament emphasises our cross-party support for the Armed Forces and the people who serve in them.”
	The Opposition probably rather regret calling this debate today. They have made themselves look somewhat foolish. While I remember, may I say how sorry I am to hear about the shadow Secretary of State’s relation in Australia? I understand that he is very ill and we wish him the very best in that illness, and I mean that sincerely. However, having been nice to the hon. Member for North Durham (Mr Jones), let me say that he admitted that Labour was planning savings in restructuring the Army and then attacked us for doing just that. The Opposition remain in denial. They seem to say that everything was
	great in defence at the general election. It was not. As the shadow Secretary of State has identified, the Opposition’s greatest weakness remains the black hole that they left us. Today, the team has been revealed in all its glory. The Opposition have shown that they have no real defence policy. They have no answers to the problems in defence. They have no acceptance of the difficult position that we are in and no acceptance of the mess made by the Labour Government of the Government finances and of the defence budget.
	In conclusion—

Alan Campbell: claimed to move the closure (Standing Order No. 36).
	Question put forthwith, That the Question be now put.
	Question agreed to.

Question put accordingly (Standing Order No. 31(2) ) , That the original words stand part of the Question.
	The House divided:
	Ayes 210, Noes 294.

Question accordingly negatived.

Business without Debate
	 — 
	Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Companies

That the draft Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012, which was laid before this House on 15 May, be approved.—(Bill Wiggin.)
	Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

European Semester in the UK

That the Committee takes note of European Union Documents No. 10834/12, relating to the Commission Communication: Action for stability, growth and jobs; No. 10557/12 and Addendum, relating to the draft Council Recommendation on the United Kingdom’s 2012 national reform programme and delivering a Council opinion on the United Kingdom’s convergence programme for 2012–2017; and No. 10846/12, relating to a Commission Staff Working Document: In depth review for the United Kingdom in accordance with Article 5 of Regulation (EU) No. 1176/2011 on the prevention and correction of macroeconomic imbalances; welcomes the Commission’s support for the Government’s efforts to reduce the deficit and set the public finances on a sustainable path, which is consistent with the conclusions reached by the IMF and the OECD in their recent reviews of the UK economy; takes note of the Commission’s efforts to address timing difficulties with the European Semester; welcomes the Government’s approach to promoting growth domestically and at EU level; and welcomes the Government’s policy of securing assurances that the UK cannot be subject to sanctions in respect of the Stability and Growth Pact or the new Macroeconomic Imbalances Procedure [4th Report of Session 2012-13, HC 86-iv, Chapter 3].—(Bill Wiggin.)
	The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 27 June (Standing Order No. 41A).

Welsh Grand committee

Motion made,
	That—
	(1) the Green Paper on future electoral arrangements for the National Assembly for Wales be referred to the Welsh Grand Committee for its consideration;
	(2) the Committee shall meet at Westminster on Monday 2 July at 11.30 am and 4.00 pm to consider—
	(a) a Ministerial statement by the Secretary of State for Wales, proceeded with under Standing Order No. 105 (Welsh Grand Committee (ministerial statements));
	(b) the matter referred to it under paragraph (1) above; and
	(3) the Chair shall interrupt proceedings at the afternoon sitting not later than two hours after their commencement at that sitting.—(Bill Wiggin.)

Hon. Members: Object.

Peter Bottomley: On a point of order, Mr Speaker. Motion 3 on the Order Paper includes the words,
	“welcomes the Commission’s support for the Government’s efforts to reduce the deficit and set the public finances on a sustainable path”.
	Is that an issue on which the Opposition could have called for a debate, rather than just a vote?

Mr Speaker: I think that the matter has already been debated in a European Committee. It is therefore not immediately obvious to me how a debate would have been sought today. The answer to the hon. Gentleman’s question—

Peter Bottomley: rose—

Mr Speaker: I do not require any further point of order. The answer to the question is no.

Peter Bottomley: rose—

Mr Speaker: Order. I have made the point. The hon. Gentleman will resume his seat.

Tom Greatrex: On a point of order, Mr Speaker. The administrators, PricewaterhouseCoopers, have announced this evening that the Coryton refinery has been sold, not as a refinery, but as an import and export terminal, meaning that most of the 850 jobs will go. Have you had any indication from Ministers from the Department of Energy and Climate Change that they intend to come to the House to make an urgent statement on the implications of that announcement for UK fuel security and energy resilience?

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. As of now, I have received no such indication. I recognise the importance of the matter to the hon. Gentleman and to others. What he has said will have been heard by those on the Treasury Bench.
	If the hon. Member for Worthing West (Sir Peter Bottomley), having exercised a modicum of restraint and patience, wishes to pursue a different point of order, he may do so.

Peter Bottomley: On a point of order, Mr Speaker. The question that I put to you was whether the Opposition could have had such a debate, rather than whether they should have had one. The answer may be the same, but the answer that the House was given was not relevant to the question that I had put.

Mr Speaker: The answer is no. I am grateful for the linguistic clarification, but the answer is the same.

PETITION
	 — 
	Housing Benefit (York)

Hugh Bayley: Private tenants on low incomes in York face a particular problem because their housing benefit is based not on rents in York, but on rents in a broad market rental area that includes towns and villages 20 miles from York, where rents are much lower. I therefore present a petition on behalf of residents of York. The petition is signed by two of my constituents, Helen Graham and Graham Martin, and is supported by the signatures of almost 1,000 people.
	The petition states:
	The Petition of residents of York,
	Declares that York is facing a housing crisis, with homelessness in York in 2010/2011 40% up on the previous year; further declares that the Government’s reforms to Housing Benefits mean that of 6,299 private rented properties previously affordable in the city, 3,700 will be lost, a reduction of almost 50%; declares that this is effectively driving people out of York and away from their jobs, families and friends; and declares that York’s Broad Market Rental Area, which determines the level of Housing Benefit currently available, should be based on the York Unitary Authority area and not on neighbouring towns including, Tadcaster, Selby, and Pocklington, all of which have lower rents than York, in order to reduce the pressure on people to move away from the city which is their home.
	The Petitioners therefore request that the House of Commons urges the Government to make changes to the boundary of the York Broad Market Rental Area to include only the York Unitary Authority area.
	And the Petitioners remain, etc.
	[P001101]

DECENT HOMES PROGRAMME (NOTTINGHAM)

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

Lilian Greenwood: I feel a mixture of pride and anxiety speaking about Nottingham’s decent homes programme. I am proud of the difference it has made to the lives of my constituents, but anxious for the future, because the final two years of investment have yet to be confirmed.
	I want to explain my pride that, thanks to a unique study produced through the knowledge transfer partnership between Nottingham City Homes and Nottingham business school, we can measure the impact of Nottingham’s decent homes programme. I shall also set out exactly what is at stake for my constituents, including tenants, their neighbours and the wider city of Nottingham. If the promised funding is not delivered, the objective of bringing all council homes in Nottingham up to a decent standard is at risk.
	Twelve years ago, the Labour Government set out their vision in a housing Green Paper and made a commitment to tackle chronic under-investment and to bring all housing up to an acceptable standard. In 2010, the National Audit Office found that, although the decent homes programme had probably had a wider beneficial impact, a lack
	“of data on these wider benefits means that it is not possible to identify the Programme’s true impact throughout its life.”
	The impact study helps to prove what MPs knew: that the programme was making a difference on the ground.
	In January 2011, the House debated “Beyond Decent Homes”, a report from the Select Committee on Communities and Local Government. MPs on both sides of the House, including me, described what good-quality housing meant for their constituents. NCH was awarded funding by the Department for Communities and Local Government in 2008 and work began to complete £187 million-worth of planned investment to tackle the 32% of council homes in Nottingham classified as non-decent. The work was carried out under three streams to maximise efficiency and match tenants’ priorities. The secure stream was to replace all single-glazed windows with secured-by-design double-glazed units and replace any old or damaged doors; the warm stream was to improve heating and insulation; and the modern stream was to make internal improvements, including replacing outdated kitchens and bathrooms. Adaptations to meet the special needs of some tenants, including level-access showers or wet rooms, would also be undertaken alongside the secure, warm and modern—SWM—programme.
	When the 2010 general election brought new uncertainty, tenants and leaseholders launched their “Nott Decent” campaign, and I was proud to join them in presenting a petition to No. 10 to ask the new Government to honour the commitment that had been made to them. We were pleased and relieved when the Minister re-allocated funding—albeit reduced funding over a longer period—to complete the programme. By January 2012, 15,900 properties—more than half of all council homes—had new windows; 3,400 doors had been replaced; 10,200 heating systems had been upgraded; 2,900 lofts were properly insulated; 9,000 kitchens and 7,200 bathrooms
	had been replaced; and 284 aids and adaptations had been made to make properties more accessible for their disabled tenants.
	The impact study measured the effect of those changes to tenants’ homes. On crime and security, the results are dramatic: burglary fell by 42% between 2007 and 2010 on two sample estates where single-glazed windows were replaced, compared with a 21% reduction across the city. The study identified that timber doors were a weak spot in houses’ overall security, which provided evidence to support replacing all external doors, not just those that were especially old or damaged. Tenants reported feeling safer in their homes—an important contribution to improved mental health and general well-being.
	Together with the installation of energy-efficient central heating systems and loft insulation, the new windows have raised the average energy efficiency rating of NCH homes from 60 to 68 points. That represents a 15% decrease in carbon emissions from NCH properties, which is equivalent to taking 2,700 cars off the road or planting 360,000 trees and growing them for 10 years. By the time the SWM programme is completed in 2015, energy efficiency from NCH homes will be saving 43,500 tonnes of carbon per year and achieving 17% of the city’s target for carbon reduction from domestic properties.
	Of course, not only are energy-efficient and better-insulated homes good for the environment; they have a real and immediate benefit to the people who live in them. Tenants not only report that their homes are warmer, suffer less damp and condensation and give them pride in their neighbourhood, but that they are saving money—and given that an estimated 12% of all city residents were in fuel poverty before the programme began, that is money they desperately needed.
	The Energy Saving Trust estimates that new windows alone can save £95 to £223 a year, and new boilers up to £225 a year. In total, improved homes are saving Nottingham tenants £3.5 million each year, making a significant contribution to reducing fuel poverty, which fell to 6.8% of city residents by 2010-11—after the programme upgraded thousands of properties. The improvements also enable tenants to get rid of extra appliances such as old electric heaters, which can often present a health and safety hazard. Combined with better security, these changes to the physical fabric of their homes have a marked effect on the health and well-being of NCH tenants.
	The impact study estimates that, as a result of the SWM programme, two lives a year are saved by protecting vulnerable tenants from the cold; that the respiratory health of 1,000 children is improved; that, every year, 12 hospital admissions resulting from falls are avoided; that 144 accidents requiring medical attention are prevented; and that, as a result of providing warmer homes and reduced fuel bills, more than 1,400 tenants have better mental health. Based on just those examples, where a measurable change and cost impact for the NHS in Nottingham could be calculated, the savings are almost £700,000 per year.
	In a time of economic austerity and public sector spending cuts, the benefits accruing from public capital investment matter more than ever. Nottingham, along with the rest of the country, is feeling the devastating impact of a double-dip recession: 19,000 people are out of work and there are six jobseekers for every vacancy.
	Construction, the fifth largest employment sector in the city, has been badly hit by the economic downturn and reduction in house building. The decent homes programme is providing vital work, and of the 560 people currently delivering SWM in Nottingham, about one third live in the city and over half in Nottinghamshire.
	Investment in decent homes is not only providing much-needed jobs for joiners, plumbers, and other workers in the construction industry; the analysis shows that every £1 of investment in the programme generates £1.36 in Nottingham city or £1.46 in Nottinghamshire as a whole, which means that the £37.6 million spent on the decent homes programme in 2010-11 generated an extra £17.3 million of additional spending in Nottinghamshire, £13.5 million of which came into the city.
	The SWM programme also makes an important contribution to training and skills development through the “One in a Million” scheme, which requires contractors to take on an apprentice for every £1 million of their contract. That has already created 105 apprenticeships, with a target of creating a total of 200 by 2015. In addition, staff on the SWM team have completed 2,000 hours of training, including externally accredited qualifications. As a result of this investment in skills, these staff can expect to earn an extra £13 million in additional lifetime earnings.
	The impact study shows that investment in decent housing works both for tenants and the wider community. However, the benefits accruing from decent homes are not secure. The funding from the Department for Communities and Local Government for the decent homes programme remains indicative for the final two years of Nottingham’s programme. In the reallocation of funding in January 2011, 53% of NCH’s allocation was weighted towards those two final years, amounting to a total of £45.6 million.
	If that investment does not go ahead, the consequences for our city will be dire. For every £1 million spent, 21 jobs are created, so cutting the funding could result in more than 950 job losses over the two years. Furthermore, NCH is committed to taking on an apprentice for every £1 million spent, so the reduction in funding would result in 45 fewer local people starting apprenticeships. If remaining heating upgrades are not completed, savings of 2,440 tonnes of carbon and £600,000 from tenants’ fuel bills will no longer be made, and a cut in funding would mean the loss not only of the original investment of £45 million into the construction industry, but of an additional £21 million of re-spending in the local economy. Most importantly, of course, if the funding is not confirmed, 7,000 tenants and their families would be left living in substandard housing.
	The loss of the investment would hit some harder than others, and one neighbourhood in Nottingham that stands to lose most is the Meadows in my constituency. Before the last election, the Meadows, one of the 5% most deprived wards in the country, was due to benefit from £200 million of new investment, which would have transformed the area. The incoming coalition Government cancelled the housing PFI scheme, and I raised my concerns about that decision back in December 2010. Subsequently, together with representatives of the local community and the council’s regeneration team, I met the Minister for Housing and Local Government to discuss the impact of his decision, and he agreed to visit
	the Meadows to see for himself the needs of our neighbourhood. Unfortunately, he has not found time in his diary to make good on that commitment, so I would like to use this opportunity to reissue that invitation.
	Nottingham City Homes was forced to reallocate funding within its decent homes budget so that Meadows residents were not left behind—to ensure that, having been let down by the new Government, they would still get their new doors and windows, boilers and insulation, kitchens and bathrooms, even though their hopes of transforming their neighbourhood were dashed. Thanks to the hard work of the SWM team, every NCH property in the Meadows has new windows, a third of the homes have better heating and insulation, and NCH hopes to complete the other two thirds before the end of this financial year. Those promised doors, kitchens and bathrooms, however, rely on those last two years of funding. The Minister really should come to Nottingham and meet some of those families in my constituency so that he can understand what his decision will mean to them.
	I also want to touch on the wider impacts. A cut to this funding would also have knock-on effects on NCH’s self-financing position under the housing revenue account, and on other investment programmes that need to be match funded by investment from the decent homes programme. Nottingham City Homes and Nottingham city council are currently making proactive use of the community energy saving programme started by the last Labour Government to insulate hard-to-heat properties in our most deprived neighbourhoods.
	Although it was right to focus resources, individual low-income householders in more affluent areas also face fuel poverty. These are often social housing tenants, and social landlords such as NCH have a strong track record of working with utility companies to help stop such homes leaking heat, making a huge contribution to the country’s carbon reduction obligations. Social housing providers need the maximum ability to retrofit their homes under the new green deal with its associated new energy company obligation arrangements. This will include the ability to match fund ECO money with housing investment programmes to get better value in tackling excess cold, helping reduce fuel poverty and reducing carbon emissions from domestic properties.
	I hope the Minister will address the following questions in his response. In 2008, a third of Nottingham’s council housing failed to meet the decent homes standard, but if funding is confirmed, all council homes will meet it by 2015. Can he confirm that the £45.6 million of indicative funding for Nottingham City Homes for the last two years of the decent homes programme will be forthcoming? If he cannot provide that assurance tonight, can he tell us when housing providers will know, so that they can plan work, keep contractors on schedule and avoid the waste of winding down programmes only to have to start them up again? Can he explain how the Government will ensure that social housing tenants benefit from the green deal and ECO work to improve hard-to-heat homes and to tackle fuel poverty?
	The Minister has said outside this House today that Nottingham receives substantial housing funding. The truth is that, as a deprived city that suffered from a lack of investment during the ’80s and ’90s, this funding is
	needed. The impact study proves that the money has been well spent. Our homes should be the places where we can shut out the world and feel safe, but if our home is cold, damp, overcrowded and outdated, there is no escape.
	Decent housing matters; investment in good council housing changes lives. This study shows that investing in social housing delivers real, tangible benefits to whole communities, including jobs and growth. Surely the Government will not turn its back on this chance to do the right thing. Good council houses are not just bricks and mortar; they are homes to my constituents, who are entitled to a decent standard of living. I hope that the Minister will confirm the funding and enable Nottingham City Homes to finish this essential work.

Andrew Stunell: I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on her speech, and on securing the debate. She spoke with great eloquence, and presented a very thorough picture of the circumstances in Nottingham and the value of the decent homes programme. I am very much on the same page as her, given the improvements that the programme can make to the health and well-being and security of tenants, and the impact that improvements in the insulation and energy performance of homes can have on carbon reduction. I also know that Nottingham has an excellent record of tackling climate change at local level.
	I think that, before dealing with the intricacies of the situation in Nottingham, I should say something about the decent homes programme in general. The Government believe that all social housing should meet the decent homes standard, which, according to the technical wording of the definition, means that it should be free of category 1 hazards, should be in a reasonable state of repair, should have reasonably modern facilities and services, and should provide a reasonable degree of thermal comfort.
	I must tell the hon. Lady that the present Government inherited not only a decent homes programme, but a huge deficit and a £3.2 billion backlog in capital investment in housing. The Government have already announced plans to invest £2.1 billion in the completion of the decent homes programme, of which £1.6 billion will be allocated to 46 local authorities—including Nottingham—and £500 million will go to registered social landlords in the form of gap funding. Those funds will make £127,000 council homes decent by the end of 2014-15, which will cover nearly 60% of the council housing that remains non-decent. The final slice of those non-decent homes will be made decent by local authorities using their own resources, and, as the hon. Lady said, Nottingham will be able to do that.
	We have already been very successful in reducing the number of homes that are not fit for people to live in. In April 2010, shortly before the general election, local authorities had 291,600 non-decent dwellings. By April 2011 the number had fallen by 26%, to 217,000. Figures for the past year are being collated, and the Homes and Communities Agency predicts that we will prove to have reduced the number by about a further 20,000 during that period. As the hon. Lady said, more is being done even as we speak.
	We believe that our funding—together with the introduction of self-financing for housing authorities and the increases in allowances that that brings them—will give local authorities the means to deal with any newly arising non-decent stock from within their own resources. In other words, they have the finances with which to maintain a steady state once we have achieved a high standard of decency.
	Let me now deal with the position in Nottingham. Nottingham City Homes is a strongly performing arm’s length management organisation. Incidentally, my area of Stockport contains an ALMO which also performs very well. Only last year, Nottingham city council extended its agreement with Nottingham City Homes for a further 10 years, which I think constitutes a very good vote of confidence. That ALMO has been able to demonstrate an increase in tenant satisfaction; it has reduced rent arrears from £5 million to £1.8 million; and it was given a two-star rating under the old regime which unlocked its original decent homes funding programme.
	When the time came for us to allocate funding to Nottingham, we recognised that the city had a significant backlog of non-decent homes—the hon. Lady has given the figures on that. That is why we allocated £86 million in indicative funding with the first two years confirmed—£40.5 million committed in the first two years. That is the largest award to any council outside London, and the Homes and Communities Agency is putting £78 million of additional investment into new housing and regeneration across Greater Nottingham by 2015, to produce 536 new homes.
	As the hon. Lady said, the impact of the decent homes funding has been substantial. It has produced a big improvement in many people’s lives, not just in better homes, but in all that flows from that. The hon. Lady eloquently explained some of those benefits, and I entirely agree that this programme has brought, and can continue to bring, real benefits to tenants in Nottingham.
	The hon. Lady referred to the study, undertaken by Nottingham City Homes with Nottingham Trent university, of the wider impact of decent homes. That study has made a very useful contribution to our knowledge, and ought to be required reading for those who doubt the importance of investing in our social housing stock. It shows why the coalition Government were right to fund authorities to make homes decent. As the hon. Lady said, every £1 million spent has created 21 jobs in Nottingham. The study gives a series of impressive statistics about the benefits that have been secured, not least reductions in crime. There are health benefits as well, of course, but some of those listed are, perhaps, a little tenuous; reductions in falls is one thing, but improvements in the respiratory health of children and in the mental health of tenants are more clear-cut.
	We have already confirmed almost half the allocation we set out in the comprehensive spending review. I know that Nottingham and others are keen to get certainty on their budgets for April 2013 onwards.
	The hon. Lady was, perhaps, wearing rose-tinted spectacles when she spoke of the performance of the previous Government. The Labour Government cut the decent homes programme by £150 million in July 2009, cannibalising one part of the housing programme to pay for new housing policies elsewhere. They also failed to meet their decent homes target. They pledged in 2000
	that they would ensure that all social housing was of a decent standard within 10 years. Sadly, that was not the case by 2010.
	Labour also made it clear in the general election campaign that they considered investment in housing, and social housing in particular, not to be a top priority. The then Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), told “Newsnight”:
	“Housing is essentially a private sector activity. Let’s be honest about this...I don’t see a need for us to continue with such a big renovation programme.”
	Therefore, although Labour started the programme, it has to be reported that they were throttling it back and were planning to do so more.
	When this Government came to power we were borrowing an additional £400 million every day in order to close the gap between what we were spending and what was coming in. It is absolutely right that the Government should keep a tight hold on all their spending. The economic circumstances that have unfolded since show the sense of taking that initial decision and the importance of continuing to keep a tight grip on what we spend and how we spend it. That does include the decent homes programme.
	I can assure the hon. Lady that we are expecting to make an announcement on the decent homes allocation for the final years in due course. I very much take her point that it would be sensible to ensure that the timing of that allowed continuity of contracts and employment. That is a point I will take away from this debate.
	I also want to say on behalf of the Minister for Housing and Local Government, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), that his undertaking to visit the Meadows was given in good faith. He is very busy and very active, and I am happy to confirm that he will in due course visit the Meadows, as he undertook to do.
	I understand the hon. Lady’s enthusiasm to get ahead, and I share it. The Government are still supportive of all the work that the decent homes programme is doing and all the benefits that it brings. We remain committed to supporting backlog authorities such as Nottingham in making its homes decent, and to supporting some of the most vulnerable in society who live in those homes.

Lilian Greenwood: rose—

Mr Speaker: Order. Is the Minister giving way or sitting down?

Andrew Stunell: Apparently, I am giving way, Mr Speaker.

Mr Speaker: The hon. Gentleman is a generous fellow. I call Lilian Greenwood.

Lilian Greenwood: I thank the Minister for giving way. I obviously listened carefully to his response, although I should say I am rather disappointed with its lack of clarity. Can he confirm how many tenants of Nottingham City Homes he expects to be living in non-decent housing by the time this Parliament comes to an end in 2015?

Andrew Stunell: Like the hon. Lady, I very much hope that the programme we originally announced will have been completed and that the successes we predicted will have been achieved.
	On that note, Mr Speaker, I am sitting down.

Peter Bottomley: On a point of order, Mr Speaker. May I ask that the House and you accept my apology? During a point of order I used the word “could”. You sensibly used the word “would”. I thought that you had said “should”. I was wrong and misrepresented what you had said, and I apologise.

Mr Speaker: The hon. Gentleman is courtesy and good grace itself. I did not think that an apology was necessary but it is very much appreciated, and I thank the hon. Gentleman for what he has said. This is the first time that the question of the Adjournment being moved has been punctuated in this way during my tenure, but I thank him.
	Question put and agreed to.
	House adjourned.